The USD/JPY pair had a pretty negative session on Tuesday, as the US dollar sold off yet again. However, the reality is that this market is most certainly in an uptrend, and we would have to fall rather dramatically to change that as far as I can see. The 108 level of course offered support, albeit just barely. As far as the 107 level is concerned, I think that is a little bit more supportive as well, and most certainly the 105 level below that is even stronger. In other words, I think it’s only a matter of time or we see buyers stepping in to pick up on US dollars as they would be considered to be a value at that point in time.
Don’t forget, the Bank of Japan continues to want a weaker Yen, and as a result they will do things to continue to push this market higher. With that, I don’t see any way to short this market, unless of course we break down below the 105 level significantly. I find it very difficult to imagine happening anytime soon, so I am fairly confident that this is a “buy only” type of market.
Massive move, happened for a reason.
Obviously, we have had a massive move in this marketplace and I find it very difficult to imagine that this market is going to suddenly reverse trends. Because of that, I am very confident in this marketplace and I still believe that by the end of the year we could very easily see the 115 level hit. Honestly, the 115 level is basically a minor area, so I think that’s only a bit of a pit stop on the way to much higher levels, perhaps a multitier move higher. With that, it’s pretty easy to imagine that this is one of those markets they traders will continue to step out and “buy on the dips.”
I believe that the Japanese yen will continue to struggle against most currencies, and that’s especially true with the US dollar being so strong in this market.
