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The USD/JPY pair fell during the session on Thursday, but bounce slightly to form a hammer just above the 78.50 level. The pair is currently sitting on the upper end of a large support area from 78 to 78.75, and as such we are in a "buy only" mode. The Bank of Japan has been working against the value of the Yen, and as such we think the 78 level looks to be a bit of a "floor" in this currency pair.
We believe that buying this pair is the only way to go, as we do not want to fight a central bank. We do think that the In this market is to be found at the 80 level, and as such this is a short-term trade, not a long-term one.