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The USD/JPY has ralied 665 pips in the last 10 days and now has hit a major area of resistance at 106.30. This is by no means a short opportunity.

After being reelected Shinzo Abe anounced a new stimulus package and Mr. Bernanke already met with him in Japan pointing out that more easing is coming from the BoJ; saying that the BoJ still has tools for further easing.

This rally has been a reaction to the announcement and meeting but really, we don ´t know the size and structure of it. The package is comming but a corrective move on the Dollar Yen is also expected. Now to the technicals.

This major zone of resistance confluences perfectlly with the 61.8% of the last leg down but not only that, it also hits with the first long targets at the 161.8 fibonaci expansion of the 1-2-3 move (not a wave count, just for observation of the fibs calculation). No matter if sellers are jumping in or buyers are closing their long positions the reaction is the same: bearish pressure at this point.

We ´re looking to jump in long for a break above this resistance zone and we see that the 103.30 level gives the best scenario for it. Not only we are at the 50% of the 655 pip move to the up side but we are also hitting short targets at the 127.2% of the 4-5 leg (again not a wave count)

The zone that we need to look with attention is the 104.34 POC (point of control) where there was massive volume being tradeed and surely there will be soome buyers around.