The USD/JPY pair gapped higher at the open on Monday, as the US dollar continues to be one of the more favored currencies out there. That being the case though, the market then spent the rest of the day falling backwards to find support. Ultimately, it did find it at the 104 handle. We filled the gap, and then bounce slightly as the hammer suggests that we are going higher. I believe that if we can break the top of the candle, we should head to the 105 level given enough time. It’s there that we will find significant resistance and longer-term forces come into play.

I think that the 104 level is significant, but breaking above that isn’t going to be anywhere near as momentous as breaking above 105 will be. Above that level, I then start to target the 110 level, over the longer term of course as it is a fairly significant move.

We should see this trend continue.

As the Federal Reserve looks to cut back on quantitative easing going forward, it makes sense that the interest-rate differential will continue to favor the US dollar over the Japanese yen as there is more “meat on the bone” as it comes to the bond market. Ultimately, I believe that every time this market pulls back there will be buyers and as a result I will look to the shorter-term charts in order to go long. I don’t think that there is a scenario in which and willing to sell this market, and I now believe that the 103 level is in fact the “floor.”

With that being the case, I think that the market will continue to go higher and ultimately give several opportunities again and again. Once we get above the 105 level, I am going to start building up a larger position, adding to it every time we pullback and find support on the short time frames. With that, I anticipate having a very large position by the end of the year, and then closing out somewhere closer to the 110 level.

USDJPY 82614

Related Articles
  1. Chart Advisor

    ChartAdvisor for November 27 2015

    Weekly technical summary of the major U.S. indexes.
  2. Retirement

    Suddenly Pushed into Retirement, How to Handle the Transition

    Adjusting to retirement can be challenging, but when it happens unexpectedly it can be downright difficult. Thankfully there are ways to successfully transition.
  3. Mutual Funds & ETFs

    The Democratization of the Hedge Fund Industry

    The coveted compensations of hedge fund managers are protected by barriers of entry to the industry, but one recent startup is working to break those barriers.
  4. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  5. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  6. Financial Advisors

    Tips on Passing the CFA Level I on Your First Attempt

    Obtain valuable tips and helpful study instructions that can help you pass the Level 1 Chartered Financial Analyst exam on your first attempt.
  7. Professionals

    The Best Financial Modeling Courses for Investment Bankers

    Obtain information, both general and comparative, about the best available financial modeling courses for individuals pursuing a career in investment banking.
  8. Stock Analysis

    These are Twitter's 4 Biggest Bets for Next Year

    Looks at Twitter's plans for 2016 under CEO Jack Dorsey, who has returned to lead the company he founded seven years after he was replaced.
  9. Investing Basics

    Why Interest Rates Affect Everyone

    Learn why interest rates are one of the most important economic variables and how every individual and business is affected by rate changes.
  10. Entrepreneurship

    Top 5 Billionaires Living In Dallas

    Learn who the richest of the rich are in a city known for creating some of the world's wealthiest people, and read how they amassed their vast fortunes.
  1. Are secured personal loans better than unsecured loans?

    Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
  2. Is Israel a developed country?

    Israel is considered a developed country, although it has substantial poverty and large income gaps. The International Monetary ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  5. Is the Wall Street Journal considered to be a conservative publisher?

    The Wall Street Journal is controlled by Rupert Murdoch via Dow Jones Publications, which in turn is owned by Murdoch's News ... Read Full Answer >>
  6. Is Spain a developed country?

    Spain is a developed country. Nearly all organizations that analyze development status classify it as such. Spain has a strong ... Read Full Answer >>

You May Also Like

Trading Center