USD/JPY really has gone over bought and will be looking to take an extended retrace and long term traders might be looking to hold out their positions a bit more and will look to buy USD/JPY around 79.50 level. Although there is another retracement level around 81.00 that can be seen but once USD/JPY started taking retrace, then it might not act a good support. The long term trader will look to buy USD/JPY around 79.50 level for targets above 81.00 level and in case the USD/JPY carries on with its momentum then the next target will be 82.90 level.
Looking at the moving averages used in daily charts, it can be seen that USD/JPY is above all the three moving averages use and in case of retracement, the first target will be the short term moving average, which is around 81.00 level but that seems to act as a weak and short term entry level. The trader will look to aim for the medium term moving average, which is around 79.25 level for an extended upward move. Looking at the RSI used in daily charts, it can be seen that it is well above 72 level and sooner or later will push USD/JPY in an extended dip.
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