The USD/JPY pair had an outstanding day on Tuesday, as we not only got back all the losses for Monday, but we also managed to break the top of that day’s range. With this being the case, it appears that the buyers have step back into this market in full force. Obviously, we do not sell this pair as the Bank of Japan is willing to push the pair higher and higher, but what has been very interesting is that lately the central bank has an evenhanded actually do anything, just suggest that it might.
Looking this chart, we see the 90 handle as the “floor” in the marketplace, and as long as we are above that level we see aptly no reason whatsoever to think about selling this pair. In fact, we suggest that every time this pair pulls back, it will simply be an opportunity to buy at a cheaper price. While many of you will not remember in the Forex markets and the behavior for five years ago, the truth is this pair used to be like that: you simply bought it every time it dipped. It’s possible that we may be heading back to those norms again.
The fact that we are close in the very top of the candle also suggests that there is plenty of bullish momentum underneath. We have stated for some time now that we believe 95 will eventually be had, and we see nothing on this chart the suggests that won’t. Because of this, we think using shorter-term charts to signify pullbacks with support below will be the way to go forward.
In fact, adding to the position as often as possible is probably going to be the best way to play this marketplace, as we believe we have entered a long-term uptrend. As long as the Bank of Japan is sitting below, one cannot think that this pair could fall too awfully far before more buyers will step in and push and higher. As for selling, obviously that can be done at this point as the Bank of Japan would certainly get involved if we got below the 90 handle again.
Written by FX Empire