With that said the volatile price action we've been seeing in USD/JPY offers up nice trading opportunities.We are hoping for a decline in USD/JPY toward the 94.50-95.00 area, where major horizontal support sits. Furthermore, the 14 day EMA (pink line) sits in that area as well, and that EMA has been the backbone of this major rally from 78.00. The distance price has gotten from the 14 day EMA adds some conviction to the possibility of pullback before higher.
A daily close below the 14 day EMA or below 94.00 invalidates the strategy, while first targets sit near the 97.50 figure. USD/JPY is a good pair on which to leave a portion of your long trades open with a trailing stop.
Written by: Liam McMahon, Currency Strategist - GlobalFxClub.com