The USD/JPY pair fell a bit during the session on Friday, but looks to be finding support near the 112 level. Because of this, I believe that the market
The USD/JPY pair fell a bit during the session on Friday, but looks to be finding support near the 112 level. Because of this, I believe that the market will continue to find buyers as the Federal Reserve looks likely to clean up its balance sheet. This is a market that is influenced by a “risk on” factor, and of course the overall interest rate outlook for both central banks. I believe that the Federal Reserve is light years ahead of the Bank of Japan when it comes interest rate hikes, so I think it makes sense that we continue to go to the upside. I have no interest in shorting, I believe pullbacks will be buying opportunities and when I look at the longer-term weekly chart, I see that we are consolidating between the 108 level on the bottom, and the 114.50 level on the top. In fact, the 114.50 level is my target and I believe the dips offer value. We may get some noise from time to time, mainly due to “risk off” incidents around the world, such as North Korea. However, long-term fundamentals I believe dictate that this market goes to the upside, especially of stock markets continue to rally.
I believe that adding incrementally and building up a larger position is probably the way to go, as it gives you the opportunity to profit from what looks to be a slightly upward yet range bound move. If we can break above the 115 handle, then it becomes more of a “buy-and-hold” scenario, but I think we are several weeks away from doing so, if not months. In the meantime, I like this is a short-term buyers’ market, taking advantage of pyramiding to build up equity in your trading account.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.