The USD/JPY pair fell during the session on Wednesday, but as you can see formed another hammer, suggesting that we are going to see further bullish pressure to the upside in this marketplace. It simply appears that we are trying to break through the 100 level, and it’s only a matter of time at this point. In fact, the last three candles make us believe that this could happen today.
However, nothing is written in stone, and you can never really tell what’s going to happen before it actually does. With that being the case, we prefer to wait for the daily close, but would be buying this pair on a daily break above that 100 handle. For us, it is a simple matter of time before it happens, and a lot of the talk that we have been hearing throughout the markets is that there is a massive options barrier somewhere near the 100 handle. This essentially is a large amount of money forcing the price down in order to keep those options viable. As soon as the time runs out of those options, whoever is holding them simply won’t care about that price anymore, and we will more than likely see a significant move higher.
Going forward, we fully expect to see the 105 level challenged fairly soon and still hold our original anticipated target for the year of 110. Of course, we have to get above this level in the meantime, which has of course been a very significant fight. Nonetheless, if we do fail again and pullback, this will more than likely just end up being yet another buying opportunity in this very bullish market. We certainly couldn’t sell it, because the Bank of Japan simply will not let this pair fall too far. It certainly won’t let it fall below the 95 handle anymore, and it appears that the market is willing to do whatever it takes to break above the 100 level. That being the case, we are simply sitting and waiting for either lower prices to start buying, or a break above the resistance to start buying. It’s really a matter of waiting for our entry.
Written by FX Empire