Short-term dips, I’m a buyer when it comes to this pair, which could very well be in the process of making a massive breakout.
The US dollar initially pulled back a bit against the Japanese yen during early trading on Thursday but then turned around to show signs of life. Ultimately, this is a market that I think will go looking at the 160-yen level given enough time, which is a large round psychologically significant figure and an area that is extraordinarily important because it kicks off the recent swing high back in July of 2024 that saw the market fall apart.
Global Economic Factors and Future Projections
The problem we have now, though, is if we clear it and continue to go higher, you would be looking at a breakout from all the way back in 1990 or so, late 1989 as well. So, you’re looking at what could be a massive turnaround. If you look at it since 1987, we’ve been forming a huge rounding bottom.
Now, unfortunately, a lot of retail traders will look at that and say well that's ridiculous, but the reality is sooner or later we have to come to a resolution. Ultimately, I do think we resolve to the upside, but there may be a significant drop here. If there is, I am more than willing to buy it. We just saw one all the way down to the 152-yen level. The Bank of Japan has a major issue with its debt, it cannot tighten rates much, and of course the Federal Reserve may have to deal with all kinds of inflationary shocks as war rages around the world. If this thing breaks 160 yen, we’re going to start to really test the strength and the possibility of a significant break in the forex markets that a lot of people quite frankly aren’t paying attention to. Short-term dips, I’m a buyer. You get paid to hold this trade, never forget that either.