The US dollar has been choppy on Tuesday in terms of Japanese yen but has remained bullish looking across the board. I remain bullish on this market.
USD/JPY
The US dollar has been choppy against the Japanese yen during the trading session here on Tuesday as we continue to see a lot of noisy behavior.
That being said, USD/JPY is a market that I think continues to watch the 160 yen level as a potential floor in the market, and I also recognize that perhaps this is a market that is much more likely to go higher than lower due to the interest rate differential and the fact that the Bank of Japan is essentially stuck.
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They can intervene; they did it about a month and a half ago, but really, that's about all they can do, and an intervention won't change the direction of a market typically; it just slows down the momentum.
Analyzing the Long-Term Trend
Now, with that being said, we are well above the area that they had intervened in previously, and we just broke above a 1986 high in this pair. In other words, this is a big deal.
I think this is a market that ultimately will go much higher, perhaps 200, maybe even 224 yen will be the longer-term target. That doesn't mean we get there tomorrow, but you get paid to hang on to the market at every session break, and as long as that's the case, then I've got no interest whatsoever in trying to fight this trend.
I'm very patient. I add on dips, very small amounts, and I do think that we have much further to go. If the Bank of Japan, for some reason, were to intervene, that's good with me; I'm more than willing to buy more at a lower price.
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