USDJPY yesterday’s break above 122 came hard and fast, indicating lots of stops were triggered around this key level. With 123 now out of the way price has stalled around 123 and just shy of the 2007 highs
Price action has been quiet throughout Asia and the NY session provides no major news to drive the Dollar. Therefor I suspect a pullback is a more likely scenario before the trend resumes, so have highlighted potential stalling points to consider bullish setups over the coming sessions.
122 is the initial breakout level, but also coincides with the Monthly R2 Pivot Point, the 21 eMA and potential bullish trendline. Depending on timing this level may provide a decent reward to risk ratio, but we also have a confluence of support around 122.12-43 which may halt any declines. Again depending on the timing of the retracement we may also find the bullish trendline also acts as support around this level.
Only a break below the 121.3 swing low would raise concerns of a much deeper pullback. One thing to also monitor is the Nikkei 225 (symbol JPN225). This currently sits at record highs and is beginning to look a little overstretched. If we see a major drop on the Nikkei then it could scupper the chances of the 2007 highs being achieved on the near-term. Overall however I suspect the 2007 highs as a target is a case of when, not if.