USD/JPY finds trendline resistance at the 85.40 area from a trendline that has been in place since the beginning of June as well as from the 20 day moving average which has all but contained the price action for a similar period. Above those levels, look for short-covering to pick up.
One bit of scuttle-butt picked up from the market is that options market-makers are short “gamma”. Long-story short, when the market is short gamma, the higher the market goes, the more options players need to buy (and vice versa).
The moral of the story is that if USD/JPY begins to ramp higher, fading strength could be painful in the short-term…
