USD/JPY Technical Analysis – February 25, 2015

The USD/JPY pair broke higher during the course of the day on Friday, clearing the top of the shooting star from the Thursday candle. Because of this, the market looks as if it is ready to test the 120 level, which is the next significant resistance above in my opinion. With that, if we break above the 120 level, I feel that this market then heads to the 121 handle.

Even if we pullback from here, we have no interest whatsoever in selling this pair, especially considering the fact that the US dollar is one of the strongest currencies in the world right now. We see a significant floor near the 118 handle, so any pullback to that general vicinity that show signs of support and probably be bought as well. We believe that most moves will be of the shorter-term variety, and that it will be very difficult to hang onto any trade for any real length of time at this point. However, but that being the case, I feel that short-term charts will be the way to trade this market going forward.

I do believe that ultimately we break out to the upside longer-term, and probably head to the 125 handle. That is going to take a significant amount of time though, so quite frankly it’s almost impossible to imagine being able to take that trade quite yet, but ultimately it is what will happen. I have no interest in selling this market as I believe that the bullish pressure below is far too strong.