The USD/JPY pair went back and forth during the course of the session on Tuesday, ultimately settling nothing. That’s not a big surprise though, because the 122 level has been so supportive in the past. With that being the case, we feel that if we can break above the top of the range for the session on Tuesday, we believe at that point in time that the market will then head to the 1.24 handle. The jobs numbers are coming out over the next 2 sessions, with both the ADP and the Nonfarm Payroll announcement, we believe that there will be a lot of volatility in this market, and as a result we know that a lot of trouble could be coming. Quite frankly though, we feel that this market goes higher over the longer term, and as a result we only have a scenario in which we want to buying.
We have no interest in selling mainly because there so much in the way of support at the 121 level as well as the 120 level. With that, it may take some patience, mainly because there so much concerned coming out of Greece at the moment, but that jittery type of situation will only last for so long. That being the case, we could head back to the longer-term uptrend that we are trying to form, but we also recognize that it’s in the middle the summer, and that can sometimes keep the market fairly quiet or sideways.
The market tends to be very volatile when it comes to the jobs numbers, so at this point in time you may choose to simply avoid this market. However, we believe that longer-term we will break above the 125 level, and continue to go towards the 1.30 level by the end of the year. It would not surprise us at all if we actually when above there but that is our conservative estimate at this point in time. We have no scenario in which we sell, simply because the Bank of Japan will continue to liquefy the markets.