The USD/JPY pair initially fell during the day on Friday but found enough support near the 122 level to turn things around and form a bit of a hammer. The hammer of course is a strong sign of support in technical analysis, so I believe that a lot of traders will be looking to start buying again. After all, the US dollar is favored of the Japanese yen as it appears the Federal Reserve will have to raise interest rates fairly soon. What will be truly interesting is that this Friday we have the unemployment situation revealed via the Nonfarm Payroll numbers out of America, and that typically moves this market rather drastically.
Currently, this market has been bouncing around between the 122 level on the bottom, and the 123.50 level on the top. The fact that this market looks very well supported down at the 122 level tells me that the market should continue to go higher. Pullbacks should continue to offer buying opportunities and I would not hesitate to go long again and again.
Friday
Between now and Friday, I think there will be a lot of short-term buying opportunities. Quite frankly at this point in time I don’t see any way I could short this market, because not only do we have a significant amount of support at the 122 handle, but we also have massive support at the 121 handle as well. I think any type of supportive candle in this general vicinity is reason enough to start buying, and I wouldn’t even necessarily feel the need to wait until the daily close, as I believe short-term traders will continue to bounce this market around and perhaps trying to “front run” the jobs number.
On a stronger than anticipated jobs number, we could reach above the 123.50 level and start heading towards the 125 handle. I get no interest whatsoever in shorting as I said previously, and I do believe that perhaps we could see this market break above 125 after the Nonfarm Payroll numbers, depending on how strong they are.
