The USD/JPY pair fell during the session on Wednesday, but found enough support in the 87.25 range to bounce enough to form a nice-looking hammer. This hammer sits just on top of a recent swing high, so of course it makes sense that it should appear here. The Bank of Japan will continue to weaken the Yen, and as a result we fully expect this pair to break out to the upside. A move above the 90 handle would of course signal another leg higher, and it would certainly have many more traders out there jumping into the trade in pushing prices up. On a break of the highs from the Wednesday hammer, we are willing to start buying on the idea that we will get a breakout one of these days.
Written by FX Empire