The USD/JPY pair rose yet again on Friday. The USD/JPY pair is a rapidly evolving one. The pair was being pressured to the downside for the longest time, but it looks as if the Bank of Japan may have finally gotten its way, as the Yen continues to slide overall, and in a very rapid fashion. Being a net exporter, the Japanese actually prefer a weakened currency in order to sell their goods to other nations. The United States is the largest market for Japan, and as a result this pair gets the most attention from the Japanese central bankers.

The recent announcement of an expanded bond buying program may have finally broken the back of the bears in this market. There have been several signs of trend reversals in this pair, not the least of which includes the pair trading above the 200 day EMA now. The pair has also seen a recent break of a multi-year downtrend line, and the smashing through of the 80 level as well. This level was even resistive enough to repel central bank intervention, so you know it was a serious one.

The bullish action form the Friday session certainly suggests that we are heading higher and it should be mentioned that the weekly chart suddenly looks very bullish as well. Because of this, we think that perhaps we are entering a bull market in this pair, and will treat it as such as long as we are over the 80 level.

Going forward, we are buying dips as long as we are above that level, and will try to add to our positions as we think that the 85 level is almost a given sooner or later, and the 90 and parity levels could be next. The move won't necessarily be a smooth one all the time, but the sudden and impulsive natures of this surge cannot be denied - this trend has changed as far as we can tell. We buy dips on the short timeframes, and look to add on further shallow dips above the current levels.

USD/JPY

USD/JPY Forecast March 5, 2012, Technical Analysis

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

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
81.0413
81.2247
81.5133
81.6967
81.9853
82.1687
82.4573

 Fibonacci
81.2247
81.4050
81.5164
81.6967
81.8770
81.9884
82.1687

 Camarilla
81.6722
81.7155
81.7587
81.6967
81.8453
81.8885
81.9318

 Woodie's
-
81.2510
81.5660
81.7230
82.0380
82.1950
-

 DeMark's
-
-
82.0770
81.7425
81.6050
-
-