The upcoming 48 hours are going to be key for the USD/JPY. Several Japanese economic metrics are scheduled for release and the Bank of Japan (BoJ) will weigh in with its interest rate decision. It goes without saying, but there will be an abundance of action headed the Japanese yen’s way.

During the coming U.S. overnight, Japan’s All Industry Activity Index (Feb.) and Leading Economic Index (Feb.) are to be released to the public. Analysts are expecting the figures to come in roughly unchanged from previous levels.

Wednesday’s U.S. overnight session will be headlined by the BoJ’s Interest Rate Decision and presser. The consensus believes that rates will be held firm at -0.1%. Any deviation from this course ― be it a rate hike or hawkish verbiage ―  is highly likely to send the USD/JPY reeling.

The USD/JPY Rejects Downside Support

In a Live Market Update from last Friday, I outlined a trading plan for the USD/JPY. It was a success, producing a rapid 25 pips earlier in today’s session. If you haven’t seen the plan, feel free to check it out here.

For the moment, downside Fibonacci support is proving valid. However, there are a few other levels to watch for the near future:

• Resistance (1): Double Top Pattern, 112.07-112.13
• Support(1): Daily SMA, 111.71
• Support(2): 38% Current Wave Retracement, 111.66

Bottom Line: In most cases, I am not real big on repeating profitable trades. Regardless of that habit, there is a convergence of strong daily downside support levels in the USD/JPY. Until they finally give way, respecting their validity isn’t a bad way to trade the action.

For the remainder of the session, I will have buy orders in the queue from 111.71. With an initial stop at 111.46, this trade produces 25 pips on a standard 1:1 risk vs reward management plan.