A.M. Update

Good morning....

We are on that slippery slope, but any potential head fake move also has the same potential to fail if it is not supported, that's the thing about changing probabilities when most assets are on the right side of the top like the Carry pairs.

Overnight on a slew of bad Chinese manufacturing and Service PMI data the USD/JPY slid and broke support at $102, although Index Futures got some kind of support from what I can only guess is the PPT, we saw the same thing last week. This will be the key to everything near term. Asia didn't do well with the Chinese data out, NKD down 2%.

 This is a 5 min chart of the USD/JPY (candlesticks) vs. ES (purple line), note the break of USD/JPY under 102 this morning, but ES failed to follow it to the lower low, someone seems to be supporting Index futures.

Here's proof of it with a 1 min 3C chart of ES, positive divegrence where USD/JPY broke.

The same on the 1 min TF chart

And the NQ chart

Right now with Yen strength on the 1 min, USD/JPY downside still has the edge, the Yen 5 min chart though is still negative suggesting a move higher is still in the works for Index futures.

The $USDX 1 min went negative and then positive overnight , chopping price about, so this will be important to see how it resolves.

Right now the Yen and $USD are locked in a short term battle which may be different central bank factions throwing support out to their various interests.

$USDX 5 min still has that slight negative suggesting Index futures will break below the range, that's just the first step though and it isn't necessary, but it is probable as we see it 80% of the time before a reversal (to the upside in this case).

So we'll continue to watch the currencies dance, USD/JPY $102 is the important level, if the Index futures are eventually going to break out (with or without a head fake move) $USD/JPY $102 will have to be recaptured.