USD/JPY: dollar weakness making bulls nervous on a 50 pip drop

USD/JPY has popped lower to test the mid-point of the 101 handle and enroute to test the 101.00 rally from 5th August.

USD/JPY rallied last week and kept going in a minor recovery of late July highs from above 105.00. 102.60 was the high until a sideways drift and a loss of confidence in the bulls opened up the downside in to today's sell-off to 101.26 current lows. 

The dollar is weak in Asia, but fundamentally, the theme remains with the Central Banks and despite a surprise recovery in the nonfarm payrolls, the Fed are still unlikely to hike this September and the BoJ have not been as aggressive as the markets had been prising in which while coupled with global risk sentiment still fragile, the Yen continues to pick up the bid.

The weaker the economy is, the more jobs the US economy seems to create?

How volatile has USD/JPY been? 

Hourly 2-Standard Deviation Volatility Bandwidth is currently 86 pips, and has been expanding, while the ATR (14) is currently 14 pips. Daily 2-Standard Deviation Volatility Bandwidth is at 769 pips and shrinking. The average movement for the current hour has been for 14 pips per hour, over the last four weeks. Meanwhile, 3:00-4:00 GMT represents peak for volatility, with an average movement of 55 pips over the same period. 

What price levels and patterns have to be considered? 

With spot trading at 101.50, we can see next resistance ahead at 101.50 (Daily Classic S2), 101.76 (Hourly 100 SMA), 101.79 (Yesterday's Low), 101.80 (Weekly Classic PP) and 101.88 (Daily Open). Support below can be found at 101.27 (Daily Low), 101.15 (Daily Classic S3), 100.90 (Monthly Low), 100.90 (Weekly Low) and 100.71 (Weekly Classic S1).