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USD/JPY Daily Outlook- May 13

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.



The USD/JPY pair kept on going higher during the session on Friday, confirming the breakout that we had seen on Thursday. The breakout on Thursday was significant as the 100 level has been so massively resistant. There were a lot of theories as to why the 100 level was so resistant, the most likely been that there were a mass amount of options barriers just above that level in order to keep the price down for larger players. Quite often, they will step into the spot market and start shorting the pair or buying, depending on the situation, in order to make sure that their options continue to appreciate in value and can be close down for profit. Whether or not this is the case, is irrelevant. What matters now is that we
have broken above that level.

That being said, it appears that the breakout is legitimate now, especially considering the Friday saw more in the way of bullishness. When you measure the ascending triangle, it appears that we are going to hit the 104 level first. Beyond there, I firmly believe that we have the 105 level, and then eventually the 110 level.


Bank of Japan


Don't forget the Bank of Japan either. They are going to work against the value Yen going forward, and the mandated 2% inflation will of course be a major challenge in an economy that has been deflationary for over 20 years. This is going to mean that the Yen must be absolutely decimated over time. Quite frankly, the bank has just started its move, and this leg higher is just yet another move higher in this pair that should continue for years on end.

By the end of the year I firmly believe that we will hit 110 in this pair. Quite frankly, if things get jittery we could go even higher. Nonetheless, I believe that buying on the dips will be the way to go going forward, if selling is no longer a possibility. I don't care if there will be pullback from time to time, I am simply not going to be bothered selling.


usd jpy daily outlook may13

Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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