USD/JPY fell on Thursday session, but recouped much of its losses. The resulting candle was a hammer, and it does look like we are starting to see some significant support at the 79.50 level. Below this area the Bank of Japan has been known to interfere in the markets, and as such traders will be very leery of selling at this point. We are in that camp as well, and as such are looking for reasons to buy this pair not sell it.
As for the short term, we feel that buying on a break of the Wednesday highs could net roughly 50 to 70 pips, but the real money is going to be made on a daily close above the 80.60 level. If that happens, we are willing to not only buying this pair, but hold onto it for a significant gain of at least 350 pips.
Written by FX Empire