USD/JPY has now had a pull back but there still isn’t enough evidence to suggest that the whole up leg from 76.033 to 84.167 has finished.
In the long term the down trend movement from the high of 2007 at 124.000 is still in progress. A break above 85.482 will indicate the long term down trend is complete and should rise to test the target at 95.000.
I am looking for a break above 84.167. This is the last major resistance level and will extend the medium term uptrend from the low of 76.033 and create another leg.
To the downside we are looking for break below 80.267 support level. This will break a key support level and extend the down movement from 84.167. This is a risky trade since the 200SMA is just below it and will be a major support level. We will have to wait for the price action to develop before we think about taking this trade.
There isn’t that much to explain with this currency. All of the above just makes complete sense. Some people maybe wondering why I didn’t trade the down movement from the high of 84.167? That isn’t my trading style and i think it’s very risky. I would rather wait for a lower high to develop and trade the last support level. This will ensure that the up leg from 76.003 is over and the down leg from 84.167 has resumed.