USD/JPY has been rallying over the last three weeks. This was unexpected since this year we have only been trading in a downtrend. In April the downtrend picked up the pace after a break of 110.

I am waiting for a retrace lower, probably to 1.10, as I have mentioned in previous updates. I hope I haven´t missed the boat. Anyway, let´s take a look at the closest support and resistance levels for short term trades/signals:

USD/JPY

Resistance                                           Support

1 – 112.30 (mild – the high today)           1 – 112.00 (mild – round number and 20 SMA on H1 chart)

2 – 112.50 (strong)                                2 – 111.70-80 (strong – last week´s high and 50 SMA on daily chart)

3 – 112.80(strong)                                 3 – 111.50 (strong 50 & 20 SMAs on H4 chart)

4 – 113.00 (strong)                                4 – 111.00 (strong)

You can trade against the mild levels. They might even turn into strong levels by the time we get there, but I prefer to trade the stronger levels.