Daily Forex Reports | by FX Empire | Thursday, 25 August 2016 06:25 UTCThe USD/JPY pair initially fell during the day on Wednesday, but we turn right back around as the 100 level continues to offer support. This being the case, the market is paying attention to the fact that there is a bit of a psychological “line in the sand” in this pair at that very large number, and that the Bank of Japan could get involved. I believe that every time this market pulls back, buyers will return but I don’t necessarily think that there’s can be enough momentum to move this market any great distances in the short-term as we are in the height of the occasion season. With this, I believe that buying short-term bounces are about the only opportunities will present themselves in the next couple of weeks.
However, September brings more volume and of course most traders back from the beaches. If that’s the case, then we should have enough volume to make a significant move. If this pair breaks down below the 100 level for any significant amount of time, I believe that the Bank of Japan will either intervene, do quantitative easing, or verbally intervene in order to push this market back to the upside. The Bank of Japan eventually gets what it wants given enough time, as history has proven.
I think that a move to the upside will probably reach towards the 101 level, or perhaps the 102.50 level above there. Ultimately, I believe that given enough time the markets will continue to rally again and again but I’m not looking for major moves. I think picking up 20 or 30 pips at a time is an excellent way to build equity in your account in these types of environments. I have no interest in selling whatsoever, because quite frankly there is such a significant barrier not only psychologically, but perhaps backed by the central bank as well. Given enough time, I think we will break out above the 102.50 level, but it probably won’t happen anytime in the next several weeks as the volume just isn’t there.
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