The USD/JPY pair fell slightly during the Friday session, but quite frankly it seems like we are stuck in the general vicinity of the 121 handle. This is a market that has broken out recently, and then pulled back to test for support. I think that it’s once we get above the 122 level on a daily close that we could truly start buying. I think that the 120 level below is going to be massively supportive as well, so quite frankly there’s no interest on my part in selling this pair. I believe that the US dollar continues to strengthen in general, and while the Japanese yen isn’t necessarily suffering from some of the headwinds of the Euro is at the moment, it does have a central bank is doing everything it can to bring down the value of the Yen.
In that scenario, I think that this pair has started to become a “buy-and-hold” type of marketplace, like we have seen several times in the past. With that being the case, I only look to buy and I recognize that pullbacks can be thought of as value in the US dollar. In fact, think of the US dollar going “on sale” every time the market falls as we continue to see tightening of US monetary policy either through interest-rate raises in the future, or just simple jawboning and strength of the US economy.
Ultimately, there is no scenario in which I sell
It’s very rare that I say that I would never sell a pair, but right now I see absolutely no scenario in which I would do so. It’s difficult to imagine that any pullback in this pair is going to be more than a short-term move. The market has certainly made itself obviously bullish over the last couple of years, and I just do not see that changing. Ultimately, I think we go to the 125 handle, and then much higher than that.
