Fine Tuning Fibs
Yes...it is an excellent tool and you have the right idea regarding its application. That being, planning to enter the trade short in the direction of the Daily trend after a retracment to a Fib level occurs.
Since the pair is trading at roughly the 87.00 level at this time, you are correct that waiting for a retracement of around 600 pips would be a ways down the road.
On the first chart below, the Fib line that was drawn went back to a move that began in early August.
We would recommend "fine tuning" where you are placing the Fibonacci tool. By placing a Fib line on a more recent move and/or using a shorter chart time frame, you will find that the retracement needed to enter a position will not be near as great. Take a look at the second chart below for the "fine tuned" version.
Note on this 4 hour chart how USDJPY pair, at this point, has retraced to the 61.8%. If that Fib level holds, a trader could take a short position with a stop above the 61.8% Fib level.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.