The USD/JPY pair shot much higher during the course of the day on Wednesday after the Federal Reserve announced its intention to cut back on quantitative easing even further, and now looks diametrically opposed to the Bank of Japan, and the continuing interest-rate differential should continue to widen. With that, I believe that this market is heading to the 110 level as I have always suggested, but unfortunately I do not think that we are going to get a pullback that I wanted to see in order to get involved.
Because of this, I am afraid that short-term charts that show signs of pullbacks and supporter probably going to be the best way to play this market. I would prefer of course to have a better entry point, but I just don’t think it’s going to happen as the Japanese yen continues to sell off against most other currencies around the world.
One-way bet.
I believe that this is essentially a “one-way bet”, and as a result even if we do pullback and go all the way back down to the 105 “floor” in this marketplace, I have absolutely no interest in selling. I believe that I am simply going to have to buying short-term pullbacks or better yet daily candles that show signs of pullbacks and support if I get them. This is one of those markets that either you are long, or you are on the sidelines. There is no way to be short of this marketplace as that would be buying the Japanese yen, probably the least liked currency that I follow at the moment. With that being the case, I will continue to go to this market again and again, as well as the GBP/JPY, AUD/JPY, and the NZD/JPY markets. This is essentially an “anti-yen” play, and has very little to do with most of these currencies. Granted, the Federal Reserve looks ready to taper off of quantitative easing even further, but at the end of the day this probably represents more yen weakness than anything else as far as I can tell.
