The EUR/JPY pair had a strong session on Wednesday, as the general risk appetite of markets around the world and proved. Because of this, it appears that the market is ready to go much higher, and as a result I feel that this market should go to the 145 level, perhaps even higher given enough time. This pair does tend to follow the S&P 500 in general, which of course is on the verge of a break out to the upside.
If we get that, this pair should follow in suit, but would also not surprise me to see a little bit more consolidation in the meantime. After all, we are heading into one of the least liquid time periods in the year, and because of that moves can’t necessarily be trusted all the time. Nonetheless, it does appear that the Japanese yen is in serious trouble, and the Bank of Japan seems to like that very thing.
Continuation of the uptrend
The grinding sideways that we’ve seen in this pair recently to me suggests that we are simply going to get continuation eventually, but it is a market that needs to take a little bit of a breather after a relatively parabolic move. It’s been a sharp grind higher, and that of course always invites exhaustion from time to time. I still believe the 145 level gets hit, and 150 shortly after that.
The real question of course is whether or not the 145 level gets it between now and the end of the year. I personally think it might be a bit much to ask of the market, but am also perfectly comfortable going long of this market in this general vicinity. Perhaps a short-term pullback might be used to gain a little bit of value in that particular move, if nothing else to maximize the potential profits and save a little bit of trading capital and a market that although it looks bullish, could take a while to get to where we want to see it go. As far selling is concerned, I have no scenario in which I’m comfortable doing so.
