USD/JPY Technical Analysis – January 15 2015

The USD/JPY pair fell initially during the course of the session on Wednesday, but found enough support at the 160 level to turn things back around and form a little bit of a hammer. While at the time of writing it does look rather well supported, we will have to see what the reaction is. In other words, we need to see a bit of a bounce from this area because there is significant support all the way down to the 115 level, and as a result we could drive a little bit deeper into the pullback before we find enough buying pressure to turn things back around.

However, this is a range bound market as far as we can see, and this is the beginning of the area that we would anticipate the support coming back into the marketplace and push in us back towards the top of the range that we had been in. Ultimately, we believe that this pair goes much higher, based upon the fact that the Bank of Japan continues to keep its monetary policy extraordinarily loose, while the Federal Reserve of course has step away from quantitative easing. Nonetheless, this is a market that does look like it’s trying to find its footing, so therefore we are more apt to look for buying opportunities than selling opportunities.

Ultimately, this is a pair that will more than likely be a “buy on the dips” scenario going forward, as it has been for some time. The idea of this pair turning back around and falling drastically is one that we don’t even Fatimid the moment, and quite frankly even if it did we would start looking for value in the US dollar as it would essentially be “on sale.” In other words, I believe in the strength of this uptrend.