Since the lows of late March, the Greenback has posted consistent gains across the majors. One of the highlights for this period has been the bullish rally of the USD/JPY. From beneath the 105.00 handle, the USD/JPY has risen more than 500 pips, north of 110.00. The action has brought a key macro resistance level within striking distance.

Until later in the week, the economic calendar facing the USD/JPY is relatively vacant. Here are the economic events to watch facing this pair:

Day                                 Event

Tuesday                          BoJ Harada Speech

Wednesday                    U.S. Independence Day

Thursday                        FOMC Minutes

Thursday                         Japan, Leading Economic Index (May)

Friday                              U.S. Non-Farm Payrolls

USD/JPY Technical Outlook

The first six months of 2018 have taken the USD/JPY on a rollercoaster ride. Featuring a massive sell-off and subsequent recovery, this market appears ready to test yearly highs.

Today’s bearish action may bring several areas of downside support on the daily chart into play:

• Support(1): Daily SMA, 110.12
• Support(2): Bollinger MP, 110.05

Bottom Line: While the areas of daily downside support may be tested very soon, the 78% retracement of 2018’s range (111.45) is a premium entry to the short. Sells from 111.39 with an initial stop at 111.76, yields 37 pips when using a 1:1 risk vs reward ratio. This trade recommendation will stay active until elected.

For the remainder of today’s U.S. session, buys from 110.15 are a positive entry to the bull. With an initial stop at 109.94, this trade produces 21 pips when implementing a 1:1 risk vs reward management plan.