Yet again, the Monday session saw the USD JPY pair break out to the upside. We continue to bang against the 115 level, which of course is a large, round, psychologically significant number. Because of this, it’s very likely that the market will continue to bang into this area until we finally break out. With that being the case, the only thing you can do is buy this market, you certainly cannot sell it. I think that it’s very likely that the pullbacks that we see in this marketplace will more than likely be excellent buying opportunities.
Pullbacks at this point time should continue to attract buyers as the US dollar is certainly on a different track as the Japanese yen. After all, the Federal Reserve is stepping out of the quantitative easing game while the Bank of Japan continues to step on the accelerator. With that being the case, this pair should continue to go higher over the longer term as we smashed through one barrier after another.
I think that this market has entered a much longer term trends to the upside. I think it’s going to be much like we had seen during the old carry trade days, which was simply as simple as buying this pair of time it falls. With that being the case, the market looks as if it’s one that you can buy and buying again. I feel the same way about this marketplace, but recognize that a lot of volatility will be found in time and time again.
This is a longer-term trend, so I feel that it’s probably best to simply buy it every time this market pulls back, but maybe doing so in small increments. Because of this, you can gradually build up a much larger position, just like we used to back in those days, bringing in massive amount of profits. I believe that we are seeing the same thing, and it’s only a matter of time before we continue that type of nice and a massive uptrend. At this point in time, I believe that the absolute floor in this market is 110.