The USD/JPY pair initially fell during the session on Thursday, but as you can see ended up shooting straight up in the air and having decent gains. The market of course has a significant amount of support down near the 101 level, so the fact that we bounced in this general vicinity really isn’t that big of a surprise to me, as I can certainly see where the buyers would be tempted to get involved. The overall consolidation area of course has been very strong and has been in a fact all year, so quite frankly I’ve been looking to go long of this market for a while now, as most of you probably have been.

I believe that pullbacks at this point in time should be nice buying opportunities, as we will see more and more support come into play. I think that the market is heading to the 102 level, but quite frankly I think we go beyond that and head towards the 103 level which is closer to the top of the consolidation area. If we can get above there, then we will finally break out and the market will move much higher. I do believe that’s going to happen sooner or later, but it’s probably going to be a while before that happens.

Buy only.

As far as this market is concerned, I am essentially “buy only” because I feel that the market will eventually break out to the upside as the Bank of Japan continues it’s very loose monetary policy, and perhaps add to it in the future. On the other hand, you have the Federal Reserve which is starting to taper off of monetary policy, but it should be noted that Janet Yellen has recently suggested that perhaps the Federal Reserve will still have to support the economy after recovery begins. Because of this, I feel that the market will ultimately break higher, but we really might have a fight on her hands between now and then. Pullbacks should continue to offer buying opportunities and if you can put up with volatility, I believe that there will be plenty of province to be had in this market. On top of that, I see a significant amount support from the 101 level all the way down to the 100 level, so quite frankly I think it’s only a matter of time, but the question is whether or not you can hang on?

USDJPY 72514

Related Articles
  1. Investing Basics

    What Does Plain Vanilla Mean?

    Plain vanilla is a term used in investing to describe the most basic types of financial instruments.
  2. Economics

    Explaining Manufacturer’s Suggested Retail Price

    The manufacturer’s suggested retail price (MSRP) is just what it describes – the price manufacturers recommend that retailers charge for their goods.
  3. Economics

    What Happens in a Make-or-Buy Decision?

    A make-or-buy decision happens when a company must choose to either manufacture an item itself, or buy it premade from a supplier.
  4. Insurance

    Explaining Indemnity Insurance

    Indemnity insurance is an insurance policy that protects business owners and employees from losses due to failure to deliver expected services.
  5. Investing Basics

    What Does In Specie Mean?

    In specie describes the distribution of an asset in its physical form instead of cash.
  6. Insurance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  7. Credit & Loans

    Explaining Equated Monthly Installments

    An equated monthly installment is a fixed payment a borrower makes to a lender on the same date of each month.
  8. Economics

    Calculating Days Working Capital

    A company’s days working capital ratio shows how many days it takes to convert working capital into revenue.
  9. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  10. Economics

    Explaining Corporate Tax

    A corporate tax is a tax levied on the profits a corporation generates.
  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. Why is the Cayman Islands considered a tax haven?

    The Cayman Islands is one of the most well-known tax havens in the world. Unlike most countries, the Cayman Islands does ... Read Full Answer >>
  3. Can mutual funds invest in hedge funds?

    Mutual funds are legally allowed to invest in hedge funds. However, hedge funds and mutual funds have striking differences ... Read Full Answer >>
  4. Why is Luxembourg considered a tax haven?

    Luxembourg has been the tax haven of choice for many corporations and mega-rich individuals around the world since the 197 ... Read Full Answer >>
  5. Who decides to print money in Canada?

    In Canada, new money comes from two places: the Bank of Canada (BOC) and chartered banks such as the Toronto Dominion Bank ... Read Full Answer >>
  6. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!