The USD/JPY pair fell for the entirety of the session with only a slight bounce off of the 79.25 level. Currently, this pair is being held up by the Bank of Japan as most of you know, and will only suffer minor setbacks.
Looking at this chart, I believe that we are going to enter another consolidation range. This time, I expected to be between 79.25 and 80.50 or so. This makes sense as the 80 handle has been so important for the pair in general, and I believe that this area will continue to attract buyers and sellers. It will be tough to make any longer-term trade, but that's not to dissuade you from trading the pair at all. In fact, I think this could be one of the more interesting pairs out there.
Looking at this consolidation area, I think trading off something closer to the 30 minute or even hourly chart should suffice. Looking at this chart, I also believe that eventually we will go higher. If we get above the 80.50 level I think that we will run all the way to the 84 handle. This is mainly because I see 84 as the next major resistance area on the longer-term charts, and this should be reflected on that breakout.
Bank of Japan
The Bank of Japan continues to work against the value of the Yen, and as such I believe that eventually they will win this battle. They have a long history of fighting in this currency pair and eventually winning, although sometimes it takes several months. There will come a time when the Federal Reserve finally stops pumping money into the economy; however it may be quite some time. Sooner or later though, this will be a long-term buy-and-hold currency pair.
With that in mind, I am waiting to see if we can break above 80.54 my first hurdle, and my second of course being that 84 handle. If we get above 84, I would be long of this pair and simply not close out the trade. Going forward, I will not sell this pair as I see far too much in the way of support below.