Over the last weeks, we observed slow consolidation on the main JPY pairs. After an initial misinterpretation, following the BOJ decision on Wednesday, the market got strongly back into the long JPY trade.

Despite yesterday’s pullback, up to a 38.2% Fibonacci Level of Wednesday movement, a significant “Bearish Engulfing” pattern is forming on a 4H chart, approaching again the 100 Level. 100 is a key psychological (round number) and technical level, therefore the pair could easily find support, due to today’s poor calendar and the because it is the end of the week.

Today’s Bearish Engulfing is key for today and any action should be evaluated after the successful closing of the pattern. However, 100 level is clearly a key level to watch. Should a breakout occur, we could see further fresh downside pressure on the pair in the following weeks, with the first support exactly at 99.00 (24th June’s low) and potentially more downside levels ahead.