USD/JPY currently sits at 81.21 and is seriously overbought at these levels from all longer and intermediate term levels. The current EU levels reveal nothing in terms of future direction except for shorter term 5 and 10 day averages that will correct from 1.2800 to 1.2755 with a Mathematical Stop, my benchmark at 1.2760. So to look at USD/JPY for a EU view reveals EU appears to be heading higher which will support and resolve my 1.2850 long trade with either a profit or breakeven. I suspect profit is ahead due to the 135 pip downtrend that I see currently in USD/JPY.
I'm not and never was a huge fan of USD/JPY straightforward at present because the JPY is not the pair it once was. At 125, the Yen was okay to swing 200 pips anytime without worry. At 76, its the line in the sand for the BOJ as lower levels for USD/JPY is a national security concern rather than a market price document. I always fear BOJ intervention at lower levels. But the case here for quick gains is too convincing due to the serious overbought price at current levels.
So Sell USD/JPY at 81.21 Target 80.56, + 65 pips. Longer term traders may want to remain to 79.83 for + 135. Mathematical Stops 81.12, 80.32, 79.86, 79.83. This pair is seriously overbought and must correct so be patient for those that wish to stay in longer. Any price rises can confidently be sold to achieve targets.
I'm Brian Twomey, Inside the Currency Market