The USD/JPY has been sliding throughout the week but is squared up ahead of the NFP report.USD/JPY 1H Chart 6/3(click to enlarge)It should be noted that USD/JPY ended last week and began this week with a bullish breakout from a triangle consolidation. However, after tagging 111.40, it fell to 108.50 where we observed a double bottom forming. As we head into the US session, price is holding under 109 and a price bottom has NOT formed. With the NFP report ahead, I think it will be important to monitor which side of 109 USD/JPY will end up on afterwards. At the end of Friday, if price holds above 109.00, there is a good chance a double bottom will be completed and price will at least push back towards 110 in the near-term. However, if price ends up holding under 109, there is further downside risk even below this week's 108.50 low - the 107.65-107.70 area will be in sight in the short-term, with 105.50 as the next support below that. US NFP historical graph (source: tradingeconomics.com) There is a tempered expectation for the US NFP jobs report, but it is not that bad a prediction at 159K additional jobs for May. In any case I would be looking to see if bulls can hold the line at 109. Then, I will see again at 107.70. I lean towards a bullish outlook for USD/JPY in the medium-term, but need some short-term confirmation. If 107.60 does not hold, I would shelf the bullish outlook and anticipate a slide towards 105.50 with risk of extending lower to 104.