The USD/JPY pair finally broke out to the upside and above the 103 level during the month of August. That being the case, I feel that this market will continue to try to build up bullish pressure, and eventually test the 105 level. That level for me represents a significant breakout if we can get above it, and would have meaning for the 110 level. I think that pullbacks will continue to offer buying opportunities on both shorter and longer-term charts, and as a result I feel that it’s a foregone conclusion that we will ultimately break out. Having said that though, it’s hard to imagine exactly when it’s going to happen. It may not be in the month of September. Nonetheless, I am “buy only” when it comes to this market.
Ultimately, I think that interest-rate differentials will continue to widen over the longer term. The Bank of Japan is still trying to the value the Yen, and certainly has no issue whatsoever with this market breaking out to the upside. I don’t necessarily believe that the Federal Reserve cares about the value of the Dollar against the Yen, so really I don’t see who would get in the way. We have been in an obvious uptrend for some time now, and now it appears that we are breaking out of a significant consolidation.
Uptrend seems intact.
For me, I believe that the uptrend is still intact, so I have no interest in shorting this market. The impulsive candle during the third week of August was in fact the thing that sent this market out of the previous consolidation area, and into the potential area of breakout. I would anticipate that even if we break out though, there are going to be pullbacks from time to time, and they should offer buying opportunities going forward. In fact, that’s exactly on going to trade this market, simply by every time he dips. I have no scenario in which to sell this market, I think we would have to get below the 100 handle before I would even seriously consider it.
