The USD/JPY pair had a slightly negative session on Monday, but quite frankly with the fact that the Americans and British are both celebrating a holiday during that session, I don’t read too much into the action for the day, and look at the chart for the last week and recognize that we have bounced off of the significant support level in the form of 101. Because of that, I feel that the market will continue to go higher, and any type of pullback should be a buying opportunity as the longer-term outlook for this pair should be fairly bullish for my opinion. After all, the interest rate should continue to widen between the 2 countries, and the Bank of Japan is pretty dead set on bringing down the value of the Yen, which has been a real problem for the Japanese export markets.
Buy time and time again.
I’m pretty sure I’ll be buying this pair of time it dips, aiming for short-term gains. Ultimately though, I think that we will breakout above the 103 level, and then had to 104 short-term, and eventually the 105 level. I think that this pair will continue to go much higher given enough time, especially considering that the Federal Reserve seems to now be in the frame of mind that we could start to see more tapering off of quantitative easing, if not flat out monetary tightening next year. That is a huge diversions from what’s going on in Japan, and with that we should see interest rates in the United States rise which of course will bring up the value the US dollar against the Japanese yen.
I am short of the Japanese yen against several other currencies, it’s just that this particular pair is top because the US dollar is in bringing in any type of swap. If we had a positive swap in this pair I’m convinced that we would be well over 105 by now. In the meantime, I think a nice range can be traded time and time again for the summer.
