- The US dollar initially tried to rally against the Japanese yen during the early hours on Friday, but it looks like we are giving back some of the gains.
- This isn't necessarily surprising, and it certainly doesn't mean that anything's changed other than maybe we're just a little stretched at the moment.
- I would love to see a small pullback that I can take advantage of. After all, the value would be the best way going forward if we get the opportunity.
How to find value in this pair
In order to find a little bit of value and continue to get long of this pair and take advantage of the interest rate differential between the two currencies and therefore I think it is worth noting that market participants will see this as a situation where the traders that are holding on to it just simply get paid at the end of every session. And I cannot stress enough at just how important that can be. After all, if you are an investor or an institution, you like the idea of not only getting price appreciation, but you like the idea of being paid interest.
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So, I do think that the longer term of trend continues, I would love to see this market plunge about 150 pips, but I don't think I'm going to get that. I think really at this point, any pullback that then shows signs of a bounce is worth peeling back into the USD/JPY currency pair to the upside. I recognize that we are approaching the top of the overall noise that we had seen via intervention from the Japanese, but nonetheless, there is plenty of support underneath that continue to push this market higher. Not the least of which would be the 50 day EMA, which is near the 154 yen level and racing towards that crucial 155 yen level. I think given enough time we go looking to the 160 yen level.
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