The USD/JPY pair initially fell during the course of the session on Wednesday, but ended up bouncing to form a hammer by the end of the day. This hammer is directly after a shooting star, so more than likely we will continue to consolidate in this general vicinity for the short-term. The marketplace does continue to have bullish pressure underneath it, so quite frankly I do anticipate that we go to the 120 handle. I think that there is a significant amount of resistance above there though, probably extending all the way to the 122 handle.
The 115 level below of course is supportive, but we haven’t touched that area for some time. I believe that the buyers are anticipating the fact that it could be so supportive, so as pullbacks come, I am willing to step in and start buying. I do believe that ultimately this pair probably goes to the 125 level over the course of the next several months, especially considering how the central banks are positioned at the moment.
Longer-term uptrend
I believe that this market is in fact in a longer-term uptrend and has been for some time. The market could find itself entering a buy-and-hold situation, but right now I think it’s basically one that you buy on dips. With that being the case, I continue to add to my already decent sized position from months ago, and eventually once we break out of feel that the market will probably bring in a rush of new buyers. Keep in mind that we have risen drastically, and the fact that we’re going sideways is normal, mainly because the marketplace has been so strong lately and you have to take a bit of a rest.
Even if we broke down below 115, I feel that there is plenty of support all the way to the 110 level which I essentially think it’s the “floor” of this market. I find it almost impossible to imagine going below that level, so essentially I have no scenario in which a willing to sell this pair.
