The USD/JPY pair tried to go higher during the course of the day on Thursday, as the 109 level has offered far too much in the way of resistance, making this market slowdown a little bit. The market is without a doubt parabolic at this point in time, so quite frankly I have no interest whatsoever in buying at these elevated levels.
On the other hand, I would love to see some type of pullback that I can start buying on signs of support. After all, the 107 level looks to be a cluster of orders, so pullback to that area with a supportive looking candle would of course be an opportunity for me to start buying this market. If we get below there, I feel that the 105 level should also provide a significant amount support as well. Regardless, there’s absolutely no way to sell this market as it is so strong. Even though it is parabolic, and it needs to pull back, it’s absolutely reckless to try to short this pair.
Sometimes we get paid to wait
As Jesse Livermore has been quoted as saying, “Sometimes we get paid to wait.” Because of that, I always think about parabolic markets like this as opportunities to get involved in a market that obviously has made up its mind, binds that opportunity has to be weighted upon. After all, buying up at this high level would be reckless to say the least. The market can’t go in one direction forever.
Looking at this chart, it isn’t until we get below the 105 level that I feel selling this pair is even remotely possible, and even then I would be a bit cautious. The Federal Reserve continues to look ready to taper off of quantitative easing completely by the month of October, while the Bank of Japan continues to have a very loose monetary policy. With that, this has become a “one-way trade”, and being careful to wait for entry points makes this one of the easiest trades out there.
