The USD/JPY pair initially fell during the first part of the Monday session, but as you can see spent the rest of the day bouncing in order to form a hammer.

This hammer is situated at the 103 level, so we feel that the market is sending a signal that we are in fact going to continue going higher.

With that in mind, we are buyers on a break of the top of the hammer, and more specifically on a break of the top of the shooting star from Friday.

Once that happens, we feel that the 105 level will be targeted.

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Editor’s Note: Equity investors/traders can use the Currency Shares Japanese Yen Trust (FXY, quote) ETF to take positions in the yen without a FOREX account.  The ETF looks to track the price of the Japanese Yen, minus ETF fee. The fund seeks to reflect the price of the Japanese yen with the shares representing a cost-effective investment relative to investing in the FOREX market.