The USD/JPY's volume is declining as the currency pair edges up towards the inflection point of our 3rd tier uptrend line and 2nd tier downtrend line.  The dwindling volume is a discouraging development for the USD/JPY's upside, though we could see a near-term pop towards our 3rd tier downtrend line. 

The USD/JPY continues to tease investors as it fails to follow through on its threats of a large pullback.  We've seen rising volume to the upside followed by climbing volume to the downside, hence the relatively tight trading range.  Despite being in the position to drop towards our 1st tier uptrend line, the USD/JPY continually experiences support at the right moment.  Therefore, the USD/JPY seems to exemplify the investor indecisiveness present across the marketplace as a whole. 

The USD/JPY may wait for the market to make its broad-based directional decision before the currency pair makes a game-changing movement of its own.  The data and news coming this week has the potential to jolt the FX markets since investors will receive heavily-weighted data from across the globe.  Investors are expecting an improvement to -43 in the Tankan since last week's BSI manufacturing index and Japan's trade balance were slightly better than expected.

Despite its relative stability over the past couple months, the USD/JPY is in a vulnerable position.  The probability of a retracement towards our 1st tier uptrend line becomes more probable by the day as the trend line creeps towards price.  Any technical failure of our 1st tier uptrend line could imply the beginning of a new leg down in the USD/JPY, which would likely inflict considerable damage upon Japan's already fragile economy.

Furthermore, there are several strong downtrend lines and the highly psychological 100 level the currency pair must brave through, no easy feat.  Regardless, the USD/JPY's supports are in place, and it is difficult to pass judgment on the currency pair until it sends a clear directional message.  

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