A measure of the strength of a rally lies in its dip bounceability
A good rally feeds on itself. Buyers pile in, they take some profit, then get back in again. This rally has been very strong and the dips have been very shallow in comparison.
Today's fall from the high has been the biggest so far at 134 pips. That's really not a lot considering how far and fast we've come.
USDJPY pullbacks
In rallies like this most people would be looking for a good dip to buy. I'd be looking to get in against a prior big break point or a fib retracement but so far we've not even come close to one of those.
USDJPY H4 chart
That's something that can test your patience as it's hard to watch these moves happen and not have a reduced risk chance of getting in. However, the same process I mentioned the other day is still valid. Look for the clues that define the intraday ranges while keeping an eye on the prior break levels. For now, 112.50/55 is where the main support is. That still wouldn't be a level I'd play with a wide stop. 113.20/25 is where resistance has no shown. While we play in between those levels the wider ones get stronger. 113.80/90 will find more sellers and buyers are likely to be increasing at 112.25/30 ahead of 112.00.
In one aspect you've got to think of it like fishing. You can fill your net just as easily with tiddlers fishing between the intraday ranges as you can catching the big fish if the bigger levels break. My advice now is the same as it was when we were around 110/111. Looks for the signs that signal whether the rally is hitting another wall or just taking a breather for the next run.
Happy fishing ;-)
