The USD/JPY pair has been very volatile during the session on Thursday, as we dropped to test the 113 level. However, we rallied a bit, and it shows that perhaps the buyers are going to try to make a stand in this area. If we can continue to go higher, and clear the 113.50 level, it’s likely that we then go to the 114.50 level again. I believe that the 115 level above is massive resistance, and if we can break above there, that is a longer-term “buy-and-hold” situation. This is a market that is going to be very volatile and choppy, but there is a certain amount of underlying bullish pressure that continues to keep this market vibrant and alive.
Volatility should continue
I believe that this market will continue to be very volatile, and the choppiness will probably keep most traders looking at short-term charts. I think that as we are reaching into the summertime months, it’s going to be difficult to hang on for a larger move, because quite frankly I don’t think it’s going to be there. The month of August tends to be very quiet and as we are getting very close to it, I think this pair will probably settle into a bit of a range. Right now, I suspect that range is between 113 and 114. If we did breakdown below the lows of the day for the session on Thursday, then I see massive support near the 112 handle.