The USD/JPY is still stuck around 100 as the highly-psychological level is proving to be as difficult to overcome as investors could have anticipated. Core Machinery Orders came in far above analyst expectations today, showing capital expenditure is improving in Japan due to dwindling inventories.

Core Machinery Orders are forward looking, so the positive release gives investors hope that the Japanese economy could be finding a bottom. Aso is expected to announce a $150+ Billion stimulus package by the end of the week aimed at reviving the downtrodden economy.

These two developments are giving some strength to the Yen, delaying a possible breakout in the USD/JPY. However, better than expected Trade Balance and Unemployment Claims releases from the U. S. today could help the cause for the bulls.

We expect the consolidation around 100 to continue until investors commit to a direction. The currency pair is holding our tight uptrend line as our downtrend lines approach. If the USD/JPY can brave through our next 3 downtrend lines, we could see some large near-term gains.

Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50.

To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11. The USD/JPY is currently exchanging at 100.08.

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