- The USD/JPY has shot straight up in the air during the trading session yet again on Tuesday, as we are threatening ¥143 at the end of the day.
- This is a market that is a little overdone, so I would not be surprised at all to see a little bit of profit taking.
- When you look at the chart, you can see there is a bullish flag drawn on lower levels, and the “measured move” was about where we are right now.
Because of this, I would not be surprised at all to see a little bit of a pullback, but that is not an opportunity to start shorting. In fact, I will look at this as an opportunity to pick up a little bit of value, taking advantage of the dips in order to get long yet again. I believe at this point the ¥140 level is going to continue to see a lot of support, if for no other reason than the psychology of that figure. I still recognize that even if we were to break down below there, there’s also the 50-Day EMA that will come into the picture as well.
Japanese Yen to Continue Losing Ground
Keep in mind that the US dollar has the Federal Reserve behind it, and of course, it is looking to tighten monetary policy multiple times. On the other side of the equation, we have the Bank of Japan, which is currently in the midst of fighting rising interest rates in the country, meaning that they are essentially printing more currency. If that’s going to be the case, then it’s likely that the Japanese yen will continue to get pummeled.
Buying on the dips continues to be the strategy that I will be using, because the market has a perfect set up from a fundamental standpoint. The market will continue to have the occasional noisy bit but given enough time I think it’s likely that we see plenty of opportunities if you are patient enough. I would not chase the market all the way up here, because you are either already long of this pair or you are not. At this point, it’s very likely that we will eventually try to get to the ¥145 level, which of course seems a bit outrageous into you look at the long-term charge.
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