Rate grinds higher after breaking into support today; traders note model and momentum accounts buying USD Monday and Tuesday—good sign a top is forming. Traders report thinner conditions.

Technical traders note a fib defense area around today’s highs and never forget that the fundamentals haven’t changed one bit in the last 72 hours; USD likely not this strong but more benefiting from Yen weakness. Still showing signs of a top, offers by exporters all the way to the overnight high at 107.77 traders say suggesting that the strength may be short-lived.

Stops likely rolled up under the 106.80 area again for today so if a break happens—look for a drop to new monthly lows fairly quickly. Aggressive traders can sell anytime over the 107.00 area. Close over the 107.00 area a caution to the bears.

USD/JPY Daily

Resistance 3:  108.20
Resistance 2:  107.80
Resistance 1:  107.40/50
Latest New York:  107.02
Support 1:  106.40/50
Support 2:  106.20/30
Support 3:  105.80

Data due Thursday: All times EASTERN (-5 GMT)

Tentative JPY Overnight Call Rate

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com