USD/JPY seems to be moving in a nice upward trend but now it seems to be testing the limits at the moment being getting really over bought at the moment. It seems that the current target is 79.50 level and from there, we might see USD/JPY taking some good extended retracement which will be initially towards 78.50 level and then it will be looking to target further down towards 77.50 level. This 77.50 level will the level mostly traders will wait out for USD/JPY to resume upward trend again and then might look to target an important 80.00 level which is also a psychological mark.
Looking at the moving averages used in daily charts, it can be seen that currently USD/JPY is comfortably above all the moving averages and in case of retracement it will primarily look to touch short term moving average around 78.50 level which is basically what short term traders look for and then the dip will look to target 77.50 level around which long term and short term moving average seems to cross each other. The RSI is above 77 which on the higher side and will push USD/JPY downward for a retrace.
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