The USD/JPY pair continued to rise in Wednesday session as the massive move up continues. The pair is in the middle of a trend change, and now we have the moving averages confirming this. The 50, 100, and 200 day EMAs are all pointing upwards, and this shows that even the trend traders are starting to either cover short positions, or buy long ones. With this in mind, the larger money players are now starting to change their tone.

The breakout above the 80 level was a monumental event, and the trend line that gave way just below it ran all the way to the beginning of the meltdown a few years ago. Because of all of these things, we suggest that the pair is now a long-term buy and hold type of pair. The swap is positive, albeit slightly, and the yield certainly won't hurt. The interest rate expectations of the United States are much higher than those of Japan, and it will only be a matter of time before this pair pays even more in swap.

The 80 level is crucial, and as long as we are above it, we can only buy this pair. It would take a multi-day close below that level to even consider selling at this point, and one would still have to wonder if the Bank of Japan wouldn't intervene at higher levels this time. Quite frankly, they have been waiting for the Yen to fall in value for ages now, and they certainly won't be doing anything to discourage the continuation of this uptrend.

The 85 level is the next natural resistance area, and it is also the 50% Fibonacci level from the most recent fall. It is at this level that the market seems to be heading. A real fight should be seen there, and if it gives way - we expect a flood of new buyers into the markets at that point as well. Either way, we are only buying at this point, and are using dips and supportive candles on the lower timeframes to add to our position.

USD/JPY

USD/JPY Forecast March 15, 2012, Technical Analysis

USD/JPY Pivot Points (Time Frame: 1 Day)

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
82.4577
82.9288
83.2407
83.7118
84.0237
84.4948
84.8067

 Fibonacci
82.9288
83.2279
83.4127
83.7118
84.0109
84.1957
84.4948

 Camarilla
83.3372
83.4090
83.4807
83.7118
83.6243
83.6960
83.7678

 Woodie's
-
82.8890
83.1610
83.6720
83.9440
84.4550
-

 DeMark's
-
-
84.2592
83.8296
83.4762
-
-