The TRY/JPY pair broke higher during the course of the session on Thursday, breaking the top of the hammer that had formed on Wednesday as well is the one on Monday. Remember, this market gapped lower during the open on Monday, based upon fears out of the Turkish elections and how that economy may react. However, you have to look at gaps as potential opportunities in the Forex market, as they do tend to be filled sooner or later.
With that being said, I believe that it’s only a matter of time before we start buying. Now it appears that we have started. With this, I believe that the market will then go back to the 47 level, and if we can get above there, it’s very likely that the market will continue to go much, much higher. In fact, that would be quite a reversal and would have me buying this pair for the longer-term move towards the 50 handle.
Volatility
It’s very likely that the market will be very volatile regardless what happens next, but I am pretty set on the idea of going higher and buying this particular currency pair. With that, I think that it’s not until we get to that level that we have to do anymore thinking. Don’t get me wrong, you can simply put on a huge position and wait for the money to roll in, but I think that it is a fairly safe bet as far as Forex trades go.
With that being said, you have to keep in mind that the swap at the end of the day is very positive if you own the Turkish lira, as the Japanese yen pays almost nothing. Ultimately, this market should go higher, but you will have to be able to simply deal with the volatility and hang onto the trade. It’s almost a situation where you have to “hold your nose”, and deal with the smell. After all, a lot of what’s driving this market will be politics, which of course is always back and forth anyway. Regardless, I expect to see 47 soon.
