Potential signal:
- I’m a buyer of this pair only.
- I would buy it on a pullback toward the ¥155.50 level with a stop loss at ¥154, as well as by it on a breakout above the ¥158 level, with a stop loss at ¥157.
- In both scenarios I would be aiming for ¥160.
- During my daily analysis of major currency pairs around the world, one of the first places always look is the USD/JPY pair, because quite frankly, it is one of my favorite pairs to trade.
- I believe at this point in time the market is likely to continue to see a little bit of a giveback, mainly due to the fact that we shot straight up in the air.
- That being said though, I remain bullish on the US dollar against most currencies, and that of course does not mean that the Japanese yen is exempt from this.
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Looking for Value
I think most traders here are going to be looking for value, and it is probably worth noting that the ¥158 level has been like a brick wall, but one we pulled back a bit during the session, the ¥157 level has offered a slight push to the upside. Whether or not it holds remains to be seen, but I think the market dropping from here is only going to offer more value. The ¥155 level is an area that I would be especially interested in, as based on the idea of “value.” The ¥155 level was previously a resistance, and therefore there should be a certain amount of “market memory” in that region as well. The 50 Day EMA is racing toward that area, so you must keep an eye on that as well.
If we were to break down below the 50 Day EMA, then it could change a lot of things, but right now I just don’t see that being the case. I suspect at this point in time we are more likely than not to continue to see noisy behavior, but I also think that we end up seeing generally upward pressure. All things being equal, this is a market that I think will eventually break above that crucial ¥158 level, and then go racing to the ¥160 level above.
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