The EUR/JPY pair did almost nothing during the session on Friday, which isn’t necessarily a big surprise. This of course is because of the fact that we are heading towards the Christmas holiday, and that the pair is in a relatively obvious consolidation pattern of the moment. However, that is something that we can use to our advantage, especially during the very quiet sessions that we should start seeing.
At the moment, it appears that the 141 level continues to offer significant support to this market. Because of this, I will be buying short-term pullbacks that reach that general vicinity. In fact, I believe it I will probably buy it in a “blind touch” fashion, meaning that I won’t even wait for candlesticks to form. I will just simply buying here that level every time we get there. At the top of the range, I believe the 142.50 level will continue to offer resistance. In fact, I think that will be the case for the majority of the week.
There is a caveat, however unlikely.
There is a caveat to this trading strategy though. If we somehow get above the 142.50 level, I believe that this market will head to the 145 level, which means of course that I would not only be long of this market, but I would be holding on for a couple of handles. That is ultimately what I think will happen, but the question remains whether or not it can happen during Christmas week. I highly doubt that, and as a result I will be quick to take profits on any pullbacks that offer them.
The Japanese yen will continue to depreciate overall, mainly because that is what the Bank of Japan wants to happen, and it appears that the USD/JPY pair will continue to appreciate over the longer term, which of course drives the value of the Yen in general. That being the case, I see absolutely no reason to sell his pair anytime soon, and going forward I believe this market will go much higher over the course of the next several months.
