What this means to me is that every pullback probably ends up being a buying opportunity.
USD/JPY
The US dollar has been all over the place against the Japanese Yen, which shouldn't be a surprise. We had a Bank of Japan meeting and statement. It suggested that the monetary policy of Japan was pretty much going to stay where it was. There was no decision to hike.
So, I think basically at the end of the day, the market kind of got what it already knew, and therefore the volatility just put us right back where we were. We're just kind of hanging around the 158 Yen level. Keep in mind the US dollar is pretty weak around the world right now, over the last couple of days. The fact that the Japanese Yen can't take advantage of that is a clue in and of itself.
What this means to me is that each and every pullback probably ends up being a buying opportunity. I'm particularly interested in the 50-day EMA if we were to pull back to that area at the 156.27 Yen level.
Struggling to Stay Below 158
That's assuming we even get that far because, quite frankly, we are struggling to stay below 158 for any significant amount of time. That's not to say that we go ripping to the upside. I think what it says is that we are eventually going to try to get to the 160 Yen level, but it may be tough sledding on the way up there.
I don't want to short this pair. I do not want to pay the interest rate differential. I do prefer to collect it at the end of every day, if and when I can, as part of my overall methodology.
So, with that being the case, I still remain bullish despite the fact that you probably get more traction with something like the Australian dollar against the Yen as opposed to the US dollar, which is kind of in a state of flux right now. We'll just have to wait and see how that plays out.
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