The USDJPY is in play today. After trading to its highest level since 7/18, the pair reversed sharply following the US CPI print. The pop above 7900 comes following the lowest 5 day range since mid-January (and lowest 20 day range since late December). Similar 5 day ranges were registered in December and October. Each time, the initial move was wrong and completely retraced. This is a function of the false breaks that accompany markets undergoing a shift in volatility expectations. Combined with former support turned resistance above 7900 and the 3 wave (corrective) advances from 7556 (record low) and 7765, the USDJPY is vulnerable.

I continue to 'believe' in the bigger picture AUDUSD and NZDUSD turns. Prices are nearing resistance as I type (10500 and 8075).

USDJPY - Daily Bars

"USDJPY_Opportunity_after_False_Break_through_7900_body_usdjpy.png,

Prepared by Jamie Saettele, CMT

AUDUSD - Daily Bars

"USDJPY_Opportunity_after_False_Break_through_7900_body_usdjpy_1.png,

Prepared by Jamie Saettele, CMT

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Jamie is the author of Sentiment in the Forex Market.