The USD/JPY pair fell during the session on Monday, but as you can see really didn't fall very far. In fact, we are essentially in an area that has been supportive previously, so would not surprise me at all to see a bit of a bounce from this general vicinity. I do not think that this market has a whole lot of downside potential in it, and the closer that we get to the September Federal Reserve meeting, the more likely it is to have a little bit of bullishness to it. After all, this market will be the most sensitive to whether or not the Federal Reserve tapers off of quantitative easing, which of course is the question that everybody's asking at the moment.
The Bank of Japan of course is keeping its policy ultra-easy, trying to devalue the Yen. If we can get the Federal Reserve to taper off in the month of September, this pair will more than likely be the most important pair in the Forex markets again. You would have a central bank its tightening up essentially, while another central bank is losing its policy is much as possible. In fact, officials out of the Bank of Japan hinted that they were getting ready to keep monetary policy even looser if needed recently.
99
I think that a move above the 99 handle on a daily close would be enough to get buyers to step back into this marketplace, and ultimately I believe that will happen. Because of this, I am waiting to see a daily close up there in order to start buying again, but do recognize that the markets will more than likely be very choppy between now and the September Federal Reserve meeting. With that in mind, you simply have to be patient and decide whether or not you can handle a long-term position in this marketplace, which has traditionally give an excellent long-term trading opportunities as it does tend to trend for years at a time. I'm hoping that's what were about to see again.
