The USD/JPY pair broke a little bit higher during the session on Wednesday, but as you can see is struggling just above the 117.50 level. With that being the case, we are buyers of this pair on a break above the top of the range for the Wednesday session, as it would signify that the buyers are stepping back in and breaking the top of the hammer from the Tuesday which of course is one of the most basic bullish signals that you can see as far as technical analysis is concerned.
The market looks as if it’s ready to continue going to the 120 level, and then perhaps higher than that. We believe ultimately that this market will be one that you can buy every time it pulls back, as it should be a multitier uptrend waiting to happen. We don’t have any interest whatsoever in shorting this market as the Federal Reserve has stepped away from the quantitative easing game. At the same time, the Bank of Japan continues to flood the market with liquidity. That of course will bring down the value of the Yen, and therefore should continue to make this a bit of a “one-way trade.” Ultimately, we think that we make a fresh new high-end that this market will probably head towards the 125 level over the course of the next couple of months.
The 115 level should be massively supportive or forward, and we believe that the absolute “floor” in this marketplace at this point in time is probably the 110 level. Ultimately we feel that the market will more than likely be one that you can continue to go long time and time again and should make plenty of careers based upon the fact that it is so one-sided. True, you’re going to have to try and time your trades from supportive candles, but at the end of the day we’ll see any way to go against this trade or trend anytime soon as the Japanese yen will become the whipping boy for the Forex markets over the course of the next couple of years in our opinion.