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The USD/JPY pair fell during the session on Monday in order to break down through the 78 handle again. This is another test of the resolve out of Tokyo by the Bank of Japan, and as such we think that the next couple of sessions could be rather choppy.
Looking at the hammer from the lows that were made about two weeks ago, there looks like a significant amount of support is in the area currently. We also believe that the Bank of Japan probably has something to do with that hammer, and as such we are certainly not willing to sell this market. Granted, it could fall further, but we are not interested in testing the resolve of a central bank. Instead, we are simply going to sit by and wait for a supportive candle in which to buy this currency pair from again. Until then, we will be very flat of this market.