Rate falls back after a weak rally in Asia; traders note that stops are building in size under the 103.50 area with bids layered below to 103.00 area. Stops said to be large enough to drive the rate through bids for a test of the 102.80 area. Failure to score the 105.00 handle very significant in my view.

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. If PPI disappoints today, that may be in the works for this afternoon. 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:  105.00
Resistance 2:  104.80
Resistance 1:  104.50/60
Latest New York:  104.12
Support 1:  103.70
Support 2:  103.50
Support 3:  103.20/30

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

7:50pm JPY All Industries Activity Index m/m -0.2%
7:50pm JPY Trade Balance 0.79T

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