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The USD/JPY pair spiked during the Thursday session as the "risk on" trade came into play. The 70.75 level has given way; we think that this pair could continue higher. In fact, overall we think that the 78 level is the bottom of a consolidation area that runs up to the 80 handle. With this being said, it looks like this is a simple range bound market that has found a bottom yet again.
We would buy pullbacks as long as we can stay above the 78 handle. If we get below there, we would buy a supportive candle after the dust settled as the Bank of Japan would almost undoubtedly have to get involved and start intervening. Remember, today is a nonfarm payroll announcement day, and as such this pair could be volatile. But we still maintain that 78 will hold as support.