Yen in consolidation mode - apparent breather before next move up

The yen has been in consolidation mode, and there's no indication that it's doing anything other than "taking a breather" before its next move up. The monthly chart shows that the steep move up can so far be counted out in two waves that are almost exactly equal in length - this is often an area where traders will take a look to see if that's it, or there's enough strength for the asset to continue the move. Looking at the daily chart, we can see that the consolidation since the recent highest point looks very much like a triangle of its own.

I've marked a red line at the 105.70 low that the yen should not fall under, if this is to remain a bullish triangle consolidation. Note also that this sideways consolidation is occurring around an apparent pivot level that also corresponds to the 111.49 Fibonacci number we identified recently as the .786 retrace of the yen back to its highest point as shown on the monthly chart (below).

There's also a point of view that the yen correlates with the movement of the VIX, which seems valid to the extent that both the yen and the VIX will tend to move inversely with equities. Similar to the ways in which gold, the dollar, and bonds will often (not always! but often) move inversely to equities. In the case of the yen in particular, it would seem reasonable to find it inversely correlated to the Nikkei stock index.

Here are the daily, weekly and monthly charts of the Nikkei. While some indicators have faint positive signs, clearly associated with this index' recent consolidation of its own, the majority of the indicators across these time frames look like it remains entrained in the downtrend: