USD/JPY gains continue above 114.00
February was the best month for the yen since 2008 but, so far, February is just the opposite. The yen is under heavy pressure and that has triggered some big gains in USD/JPY.
I suggested longs yesterday and the case is even stronger after the bullish outside reversal today. It engulfs the prior two days and would be confirmed by a close up here.
Aside from the technicals are three great reasons for longs:
- Risk aversion is ebbing
- Fed hike odds are rising
- Seasonals
My initial target is 116.00 but you can make the case for a rally all the way back to 120+.
The yen crosses look equally, if not more enticing. GBP/JPY is up 266 pips today and CAD/JPY is up 202 pips. Both are showing signs of more strength to come.
