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According to Light, USDJPY made a v-shaped recovery last week on hopes of a Greek debt deal. The weekly candle chart shows that the market has formed a large bullish hammer candle. He says this is very significant as it indicates that previous structural resistance has become new support and USDJPY’s long-term uptrend will remain intact.

The daily candle chart shows that prices have been retracing within a descending channel since mid-June. Given the strength of last week’s reversal pattern, Light expects prices to break above the channel and ultimately re-test the June highs of 126.00. His strategy for this week is to buy the first pullback following a break above the channel.