The decline from 125.80 to 116.15 in the USD/JPY currency pair is in three waves with first minor three subwaves in A, so we think that pullback from the last few months was nothing else than just another correction within ongoing uptrend that is in play already since 2012.
For USD/JPY traders, it’s been a particularly trying two and a half months. Since late August, the pair has carved out a tight 300-pip range between 118.50 and 121.50, never closing beyond this zone despite central bank decisions on both sides of the Pacific, a series of disappointing U.S. jobs reports, and a raft of other economic data.
The liquidity found in foreign exchange markets allows for more trading opportunities than many other markets, which is why Conor O’Mara, investment director at Three Rock Capital, has more than 50% of exposure in forex.
It’s been a good start to the European session on Friday, with the encouraging eurozone PMI readings compounding the bullish sentiment on the back of Mario Draghi’s monetary stimulus hint in yesterday’s press conference.