By: DailyForex.com
The USD/JPY pair fell during reckless trading on Friday, pulling back to the 101 handle. It was a completely "risk off" type of day, but at the end of the trading hours in America we started to see a significant amount of bullishness in the stock markets, which of course slow down the descent of risk based currency pairs such as this one.
.jpg "USD/JPY may 27")
The biggest thing about this chart that I noticed right away is the fact that we are coming back towards the ascending triangle that had lifted this market in the first place. It is because of this that I feel on signs of support, it's time to start buying again. I don't know the timeframe, and quite frankly it doesn't matter because I believe this is a long-term situation. In fact, this market will more than likely continue to grind its way higher over the course of the next several years, and as a result it will look more like 2005, when we had the "by the dips" mentality in the Yen related pairs.
Continued bullishness
I believe that when this market pulled back, is simply the Dollar going on sale against the Yen. There's no reason to think that this market is suddenly going to change direction, especially with the Bank of Japan looking to devalue the Japanese yen going forward. With that in mind, it's obvious that you cannot sell this marketplace, and I do believe that the 100 level will be the "floor in the market" when it comes to this pair. I have a hard time believing that we break down below that level, and even if we did there has to be a ton of buy orders below there.
I think based upon the ascending triangle that I have marked on the chart, we should be aiming for the 105 level, and it is only a matter time before we get there. The real question is whether or not we will find support here, or lower at the 100 handle. If you look at the breakout candle of the triangle that is roughly where we stopped falling during the session on Friday, leading me to believe that we may not even make it all the way to 100 handle. Regardless, it really doesn't matter - I am only buying this pair, and I plan on doing it often.