Rate falls back after a weak rally in Asia; traders note that stops were building in size under the 103.50 area with bids layered below to 103.00 area. Overnight low and action played out that scenario and the rate is set to rotate higher. That push higher needs to stall at the 103.80 area again to stay short and ADD to position. Stops said to be large enough to drive the rate through bids for a test of the 102.80 area but bids apparently were big enough on the first try.

Upside will continue to be labored now in my view but be nimble on shorts; we need a solid close under the 103.80 area next for the week after a brief corrective rally. Conviction of the sellers being challenged but I think the weak hands are the longs as the volumes are increasing on the breaks and lighter on the rallies.

Traders note that the market continues to trade technically and expect stops to be run in both directions near-term; Day traders continue to get a lot of opportunity as the rate will likely cover a lot of the same ground twice on the hourly time frame. Resistance at 104.80 area remains significant now and rallies should be sold.

USD/JPY Daily

Resistance 3:  104.50
Resistance 2:  104.00/10
Resistance 1:  103.70/80
Latest New York:  103.38
Support 1:  103.00/10
Support 2:  102.80
Support 3:  102.50

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

7:50pm JPY Monetary Policy Meeting Minutes