USD/JPY Forecast: Buy the Dips

The 50-Day EMA sits just above, and therefore it can cause a certain amount of trouble. After that, we have the 200-Day EMA, and therefore you need to pay close attention that one as well. If we break through both of those, then it’s likely that we go much higher, perhaps trying to reach towards the ?137.50 level where we had seen a lot of selling pressure previously. Breaking above that unleashes quite a bit more upward momentum, turning the entire market around and rejoining the massive uptrend that we had seen during the previous year.

If we turn around and break down below the bottom of the candlestick, then we could go looking towards the bottom of the candlestick on Monday, which opens up the possibility of a move down to roughly ?128.50. Anything below there then opens up an attack on the ?127 level underneath that level, which is where I think the bottom opens up, and we open up a massive air pocket. As things stand right now, I do think that we are in the midst of trying to bottom, and therefore I do like the idea of buying short-term pullbacks that give us an opportunity to pick a “cheap dollars.” After all, the Federal Reserve is nowhere near loosening its monetary policy, and therefore think you’ve got a situation where we will continue to see the US dollar attract a certain amount of inflow, especially as it looks like the global economy might be getting ready to slow down and therefore people will be looking to pick up greenbacks anyway. With this, I think we have a real shot at this market trying to turn around.

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