The USD/JPY pair broke higher during the course of the day on Thursday, slicing through the 115 level. However, we are still in the midst of the shooting star from the Wednesday session, so we have not cleared the resistance quite yet. Keep in mind that today is the nonfarm payroll numbers out of the United States, and that number always has a massive impact on this particular currency pair. With that, we feel that this market will more than likely offer buying opportunities on dips, because it’s obvious as to which direction the market wants to go overall. We hope for this, because we think that represent value in the US dollar. However, if we don’t get it we recognize that a move above the top of the shooting star is probably bullish as well.
We think that the 110 level is the “floor” of this market, and quite frankly we don’t even necessarily think that we are going back there anytime soon. Pullbacks should continue to find buyers as this market has obviously become very bullish, and just about everybody in the world knows it now. Ultimately, we believe that this market could go as high as 120 between now and the end of the year at this rate, but quite frankly our original end-of-the-year target was 115! That being said, we’ve already reached where we thought we would by then.
We think that this market should continue to offer buying opportunities going forward, and both short-term and long-term traders alike will continue to push it higher. This particular marketplace for us is one of the most bullish and the world, so this is deathly a “buy only” type situation. The Bank of Japan has to be absolutely thrilled with the way this is going, so certainly there will be any interference out of Tokyo. The Federal Reserve is exiting the quantitative easing game, so we now begin a longer-term uptrend that could last for several years as far as we can tell. Ultimately, the Bank of Japan will continue to have ultra-easy monetary policies.