USD/JPY fell during the Monday session as the volumes in America were light. The holiday (Martin Luther King Day) in the US has most large businesses and banks closed for the day, so trading volumes would have been almost non-existent. The pair continues to tread water just above the 76.50 level, and this is the start of large support in the market.
The level marks the start of actions out of the Bank of Japan to weaken the Yen. The central bank could very well intervene at lower levels, so we aren't willing to sell at this point, even with the considerable pressure from above. The pair could be bought, but we need to see some kind of supportive candle in the area we find ourselves in, or just below. Look out for comments from the Bank of Japan, as it will often jawbone ahead of the actually intervention. In the mean time, we are waiting to see if the BoJ starts to get active again.
USD/JPY Forecast January 17, 2012, Technical Analysis