The EUR/JPY pair rose during the session on Thursday, breaking well above the 143 handle for the first time in ages. You can see that we have been struggling to get above it over the last couple of weeks, so this of course is a very bullish sign. I believe that any pullback on the short-term charts now will simply offer a nice buying opportunity, as his pair continues its very strong move higher. Obviously, the 143 level should now offer a bit of support, and I certainly think the 141 level well. That was the range of the previous consolidation area, so I see no reason to think why the markets will be able to break down below it.
The shape of the candle is also impressive, as we have closed towards the top of the range. When a market gives very little back by the end of the session that typically means that you will see continuation, so a move above the top of the candle is enough of a reason to start buying. However, pullbacks are always welcome as they offer “value” in a pair that is obviously bullish.
Bank of Japan
The Bank of Japan has just started to ease its monetary policy, and that of course should continue to devalue the Yen going forward. That will be true in most currency pairs, and the fact that the Euro has been grinding its way higher against the US dollar certainly is in hurting this particular pair. Ultimately, I believe that this market will head towards the 150 level, and possibly even higher than that. Now that we’ve had a nice grind sideways for a couple of weeks, I believe this market can finally start to pick up serious momentum and start to become somewhat parabolic like it had been previously.
I was hoping to get some type of pullback in order to take advantage of cheaper prices, but obviously the market has a completely different idea at this point in time. Buying is obviously the only thing you can do in a market like this.
