I am not a big fan of trying to step in front of a big move, but always on the lookout of trying to find a period of consolidation and look for a setup for a continuation trade back in the direction of the trend.
In regards of the USD/JPY, a few weeks ago I noticed a bigger move brewing, and now I am asking myself if this is the near term top of the move. If you look at this chart below, you can see as of Friday we have peaked in the 88.50 level and now we look like we could be in a period of a slight pullback/consolidation.
For me to stay bullish, this pair should remain above the 84.00 level, anything below that and the risks of a move back into the longer term trend is heightened.
But keep in mind the longer term chart of the JPY continuous contracts, there is still room to run “lower” in the medium term. But according to longer term RSI, we are oversold. More than likely, those conditions will have to be worked off soon.
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Disclaimer: I have no positions in the USD/JPY, but may in the next 72 hours