The pair "usdjpy" has been on rally since yellen stated "the case for rate hike has strenghtened" , the pair rallied more than 350 pips since friday and it was supported by a trend line on the 1h chart. However the pair is currently testing the upper band of the downside channel.
The pair has been in downtrend channel since january and is currently testing the channel up at 103.70-80¥.
Trade recommendation : Short the pair at this point targeting 102.20 ¥
Stoploss if the pair closes the day above that area.
You can wait for a break of channel and enter long .
However put in mind the possibility of rate hike in september.
we have two scenarios ; the first one is that usdjpy is going to respect the channel for the moment and pullback to trendline support on the hourly chart where 102.20 lies and rally again from the point and break the channel on the news of rate hike .
The second scenario is the pair breaking the channel and testing the upper trend line of the rising channel shown below.
