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USD/JPY - Buy the Dip Strategy

In the second half of October, USD/JPY made a strong run up from about 108.10 to 121.50. I have noted that this rally looks promising as a bullish continuation breakout from the last couple months of consolidation. However, a break above 122 would be needed as the next confirming bullish signal. 

USD/JPY Daily Chart 10/26

(click to enlarge)

Today we have a retreat from the 121.50 area. Now, if price falls back towards 120, we should see support. 

USD/JPY 4H Chart 10/26

(click to enlarge)

In the 4H chart, we can see that around 120 is the cluster of 50-, 100- and 200-period SMAs. If price can hold above this area, bulls should still be in charge especially if the RSI turns back up after approaching 40. This would be a signal to at least test the 122.00 resistance.

A break below 119.60 on the other hand, should warn us that bears might still be in charge and that USD/JPY is still in a medium-term consolidation mode.