The USD/JPY pair fell a bit during the course of the session on Thursday, as we continue to see quite a bit of selling pressure. However, by the end of the day we did bounce a bit and it only further solidifies my opinion as to what this pair is about to do. I believe that there is more than enough support below to keep this market going higher, and that it’s only a matter of time before the buyers reenter the market.
If you keep in mind that the Federal Reserve is fairly close to raising interest rates while the Bank of Japan is probably light years away from doing that. Because of this, it’s only a matter of time before this market goes higher in my opinion, so I am simply waiting for supportive candles or impulsive candles to the upside in order to take advantage when I see value in the US dollar. After all, there is a significant amount of noise below, extending all the way down to the 118.50 level.
Previous Consolidation
The area just below is previous consolidation as far as I can see, as we had bounced between the 118.50 level on the bottom, and the 122 level on the top for several months. Now that we are reaching towards that area, it makes sense that the buyers should reenter and start going long fairly soon as the general situation for both of the currency is really hasn’t changed much.
I think that this pullback should offer value that people will try to take advantage of soon, and then reach towards the 125 handle yet again. If we can finally break above the 125 handle, the market then enters a “buy-and-hold” type of situation. At that point, I would anticipate that the market would try to reach towards the 130 handle. Selling isn’t even a thought.
