The USD/JPY market had a positive showing on Monday, after printing a bit of a perfect hammer for Friday. The candle on Friday touched the 95 handle, and then proceeded to bounce 250 pips in order to form a perfectly placed hammer. On top of the fact that the market touched the 95 handle for support, it also had sliced through and back over the 100 day exponential moving average. That in and of itself was reason enough for me to be interested in buying this market.
Going forward, I do think that the 100 level will be resistant, but in the end I don't think it's going to be something the market can't get over. In fact, I believe that the more time we spend above 95, the more likely we are to see this market breakout again. The 100 Level Giving Way will more than likely see the market attempt to reach the 103 level again, and above there we would certainly see the 105 level.
Bank of Japan is behind you
If you are long of this market, you have the fortune of having the Bank of Japan behind you as well. They continue to try and jawbone the value of the Yen down, and as a result we think this market will continue to grind its way higher. If you are a long-term trader, there is aptly no reason to exit this market anytime soon, and if you are a short-term trader, I would suggest becoming a long-term trader when it comes to the Yen!
For those of you that haven't been trading that long, you may not remember a time period where all you had to do was sell the Yen to make money in the Forex markets. We aren't quite there yet, but I do believe that's going to happen again. Of course, there's also the possibility of a bubble blowing up, but I don't think were anywhere near that being the case yet. I buy pullbacks in this pair, and will continue to do so for the foreseeable future.
