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The USD/JPY pair rose during the session on Monday as the buyers stepped into the marketplace. However, we are currently in the middle of a massive consolidation zone that extends from 77.50 to the 79.50 level. With this in mind, it's difficult to get overly excited about anything in this pair right now. Short-term traders such as scalpers will find this market an easy one to play because of the well-defined area, however if you have a little bit longer time frame it is almost impossible at this point.
Once we break above the 79.50 level, we think this pair could go much higher. Certainly the 80 handle is one to overcome, but once we do we really could see an acceleration of buying. As for selling is concerned, we would only do it near the 79.50 level and certainly wouldn't do it on a break of the bottom of the consolidation. This is because the Bank of Japan is well-known to intervene in this pair, and we do not want to be on the other side of that trade.