The USD/JPY pair rose during the session after a very strong jobs report for the month of April, as the US employment situation turned out to be much stronger than anticipated.
This of course has people in a “risk on” attitude, and it also brings up the possibility of higher interest rates in the United States sooner rather than later. However, that seems to be very unlikely, and it certainly won’t be anything that the Federal Reserve does on purpose. Nonetheless, this means that this pair should continue higher, and the Bank of Japan is working against the value of the Yen certainly won’t harm it’s going higher either.
Looking at this chart, it’s obvious that the 100 handle is extreme resistance, and we do need to get above that level in order to start going long with any type of confidence. If we get a daily close above that level, we think that the market will more than likely head towards the 105 level first, and then the 110 level over the longer term. We fully believe this to be the case, and this is our base case for this currency pair right now.
Looking at this chart, we see aptly no signs of weakness, and would have to look at every dip in this pair as a potential buying opportunity as the market has been so resilient over the longer term. We believe that the 95 level will be a bit of a “floor” in the market, and because of this we feel that the market will see continued bullishness over and over as pullbacks come. We believe that there are plenty traders out there that have not nailed take advantage of this move yet, and as a result more and more will enter the fray every time we get.
This market also looks like it is consolidating between the 97 and 100 levels and because of this we would be willing to buy this market at the 97 handle without any significant price action, simply as a “blind touch.”
Written by FX Empire