The USDJPY rallied – as you would expect – on the strong US employment numbers. Seeing the pair is trading at high levels going back to 2007, there are little in the way of technical levels. What we do know is we are moving away from the 61.8% retracement level of the move down from the 1997 high to the 2011 low at the 120.149. BULLISH. We did test a high from 2005. The high that year came in at 121.40 – the high today is 121.37. Were sellers leaning against this level? Perhaps.

The high from 2005 and the high today were close.

The high from 2005 and the high today were close.

Looking at the hourly chart, maybe their is something more about the 121.40 level.

A channel trend line top, comes in at 121.40 as well (see blue lines in chart below). So perhaps the level is more important from a technical perspective

Having said that, how can you pick a top in something that is racing higher and higher with little in the way of corrections? You cannot. The best you can do is try and anticipate levels that make sense as a risk defining level. Traders who sell near the level, can always put a stop on a move above. That goes from profit takers and sellers who think enough is enough.

Of course, it is better if you are long and taking profit against the level Anyone who has tried to pick a top against many a topside trend line on this surge higher (including the 120.149 level yesterday), may have seen corrections – and that is not all bad – but they have been fighting the major trend along the way.

USDJPY rallies to topside trend line.

USDJPY rallies to topside trend line.

Looking at the 5 minute chart, I first pity the selling that took place right before the number that took the price to 120.12 (it checks with Bloombergs chart to). The 38.2-50% of that trend move higher comes in at 120.74-89. This will be an area that there should be buyers if the buyers are to remain in control.

USDJPY should find buyers on corrections in this area.

USDJPY should find buyers on corrections in this area.