The USD/JPY pair initially rose during the course of the day on Thursday, breaking above the 122 handle. However, we ended up finding enough resistance above there to turn the market back around and form a shooting star. The shooting star of course is a negative sign, so at this point in time I would not be interested in going long quite yet. However, I would also be remiss if I didn’t look at the bigger picture.

With the Nonfarm Payroll numbers coming out of America today, you can expect quite a bit of volatility in this pair. It does tend to move the USD/JPY pair, and as a result I am paying attention to this market, and of course the USD/CAD pair because Canada is also releasing employment numbers. In fact, I believe that those are the 2 most important markets of the day.

Breaking out of consolidation?

The question now is whether or not we are breaking out of consolidation. After all, we have been grinding away between the 118.50 and the 122 levels for some time. I think if we can break above the top of the shooting star, this market will then try to reach the 125 handle in relatively short order. Keep in mind that the move during the session today will probably be very volatile and quick, but at the end of the day I still believe we go higher regardless. I don’t know if it’s going to be right now, but eventually we will reach the 125 handle. I think pullbacks also offer nice buying opportunities, especially if you can find a supportive candle with a bounce somewhere close to the vital 120 handle.

As things stand at the moment, I have absolutely no interest whatsoever in selling this pair. Obviously anything can happen, but at this point in time I believe that the real momentum is to the upside and not the down.