The USD/JPY pair fell during most of the session on Wednesday, but bounced back in order to form a hammer. This hammer is focused around the 88.50 level, which of course is where last week’s hammer focused on. Because of this, it appears that we are trying to build a bit of a base and move higher from this point.
Within this chart, we also see the 86.50 area as a potential support level as well. The Bank of Japan is still working against the value of the Yen, and as a result we think this pair will continue to drift higher. We do see 90 as a significant barrier, but it appears that we are winding up in order to breakout. With this in mind, we will be buying this pair on a break out the top of Wednesday’s candle, or on a pullback that shows signs of support.
Written by FX Empire