The USD/JPY pair had a monumental day during the session on Thursday, finally breaking above the 100 handle. For what seems like ages now, this market has stalled every time he got near the 100 area. There have been various theories on this, and one of the most credible seems to be the fact that there were massive options barriers at that level recently. If that’s the case, either the barriers have been smash through, or they simply have about raided as the potential options have expired.
No matter what, it’s obvious that we have broken out. With that being said the ascending triangle that had been formed in this marketplace is now broken out to the upside, and it appears that we could possibly rise in value as high as roughly 104 in the short term. In the long-term, we actually think that we are heading towards 110, and possibly even by the end of the year.
This being the case, it appears that the Yen will continue to be sold off, and the fact that the US dollar has been so strong in general certainly works in favor of this particular currency pair. It should be noted that the Yen lost ground against most currencies around the world on Thursday, but it should be also noted that some of them perform better than others. With the US dollar being so favored at the moment, it makes complete sense that this pair not only broken out, but close towards the very top of the range for the session.
Looking forward, we believe that pullbacks will be buying opportunities as this market continues to be very bullish. As far as selling is concerned, we have not even have that thought for quite some time, and the move on Thursday certainly does nothing to change our opinion. That being the case, we simply buy on dips, and have gone long yet again above the 100 handle. It is at this point that we feel the market will accelerate to the upside yet again, giving us another massive move higher.
Written by FX Empire