The USD/JPY pair bounced during the session on Friday, using the 116 level as a springboard. Ultimately, I believe that this market will continue to consolidate, and if we can break above the top of the range from Thursday, I have no qualms whatsoever about buying this pair and aiming for the 120 level first, and then eventually the 122 level. If we can break above there, we will then continue the uptrend out to the 125 handle, which is what I believe happen sooner or later. The question isn’t whether or not we can do it, but when will happen?
I believe that the 115 level below is massively supportive, and therefore have no interest whatsoever in selling this pair. With that being the case, the market looks as if it will eventually go higher and that every time it pulls back it could be a potential buying opportunity. Remember, the Bank of Japan continues to work away at the value of the Japanese yen, and as a result this market should continue to go higher. On top of that, the Federal Reserve has step away from quantitative easing so that of course puts upward pressure on the US dollar as well.
The uptrend continues
I believe that the uptrend continues going forward, although we may be taking a bit of a rest after a nice move higher. With that, I believe that this market cannot be sold, and the 115 level will continue to attract buyers. Even if we broke down below there, we could probably go down to the 110 level. That level should be even more supportive than the 115 level, as it is the site of a much more impulsive break out to the upside.
Unless of course or some type of financial crisis or problem, this pair should continue to do well. The central banks to look like they’re ready to turn their monetary policies around, so of course it makes sense that we will continue to follow the uptrend that we have seen for so long.
