The EUR/JPY pair had a very strong showing on Thursday, and in fact managed to breakout above the top of the shooting star from the Wednesday session, a candle that I thought would keep this market consolidated. That being the case, it appears that the market is ready to continue much higher, and in the short term I believe that we are heading towards the 133 handle. In fact, I did buy this pair about halfway through the session during American trading on Thursday.
I believe that eventually we will hit the 135 level, but there's probably a bit of grinding to do between here and there. I look at the 130 handle as a potential "floor" in this marketplace, and because of that I think that any time we pullback there will be a buying opportunity on the short term charts. After all, the Bank of Japan continues to work against the value the Yen, and the Euro seems to have a life of its own at times. After all, it's the currency that they just can't kill.
Buying the pullbacks
I am buying the pullbacks going forward as well. I'm going to be adding small positions to my already medium-size position in order to maximize the profits from what appears to be a very positive turn of events. I would say that the 128.50 level now looks to be very supportive, and I would be surprised if this market managed to get below that area. On the other hand, pullbacks will appear simply because of all of the noise above. We have already made all of our easiest money shorting the Yen, and now serious work has to be put in.
That's not to say that this market will continue higher, I actually believe it will. However, we are going to have to grind away from time to time, and of course headlines will continue to affect with this market. But in the end, and over the long-term, I believe that we will go higher just simply based upon the fact that the Bank of Japan has just recently started their easing cycle.