USD/JPY has been under pressure for the past several weeks, having failed to take out the 115.00 figure on multiple occasions. Furthermore, the pair is failing at its key correlation with 10-year bonds not rallying when yields go up and falling when they decline. That’s a warning light for dollar bulls as a breakdown in correlation often presages a decline in price.

Tomorrow the market will get a look at two key data points — CPI and US Retail Sales. Both numbers are expected to be worse than the month prior. However, if they actually miss their forecast and turn negative, USD/JPY will likely test the key support at the 113.00 level and a break there could lead to a much sharper selloff towards 110.00 as investors will begin to fear that US growth may have peaked.

For now, USD/JPY remains in a tenuous uptrend, but it must hold the 113.00 level otherwise it will have formed a very ugly quadruple top and may drift all the way to 110.00 by year-end.