The USD/JPY pair had a slightly negative session on Wednesday, but managed to close relatively close to the opening essentially negating any type of action one way or the other. After all, we have risen high enough to test the 97 level as resistance, and will certainly tested the 95 handle for support as well. The 95 handle is a major area in this market, and as a result it does not surprise me at all that the level held.
As you can see on the chart, there is a bit of a trend line that we are currently messing with, but ultimately I always tend to trust horizontal lines a bit more than trend lines. The 95 handle is important simply because the Bank of Japan has suggested that it is the bottom of the "acceptable range" for the value of the Yen. Because of this, there will be a little bit of a natural bit in the general vicinity.
Remember, central banks take their time
Do not get fooled into thinking that if the market drops below the 95 handle that the Bank of Japan has suddenly stopped caring about the value of the Yen. Central banks tend to work on their own time, and in very casually as they know they could move the markets drastically if they choose to. With that being the case, I have seen several times where significant support like that gets broken, but the central bank steps in shortly thereafter to absolutely obliterate the sellers. I have a hard time believing that people will be comfortable being short of this pair below the 95 handle, and as a result I would be looking to buy a supportive candle below that level and become aggressively long of this market. On the other hand, we may break the top of the range for the session on Wednesday, and that's enough for me to start buying as well.
I know that the Bank of Japan still hasn't done a lot of the things that it's threatened to, but in reality I simply am not comfortable selling any of the Yen related pairs at the moment.
