GBP/JPY is a market that is getting out of control and volatility is probably going to continue to pick up. But at this point in time, the trend is still very positive. And that's something that you're going to have to be cognizant of. With that being the case, I have no interest in trying to get to cute here, I am looking at dips as potential opportunities. However, I don't want to put huge positions on. I think that will be the death knell for some traders accounts, as there has been so much concern with the Japanese yen and potential intervention that people have no idea what do. Underneath, I see the 50 day EMA as potential support right around the ¥191 level.

On a Fall…

If we do fall down to that area, it would be rather ugly and scary, but it also might shake out some of the so-called hot money in the market, which might not be the worst thing with this. I remain optimistic and cautiously bullish, but the key word here, of course, is cautiously. Keep in mind that this is a market that continues to be very noisy but at the end of the day is still very bullish overall. Ultimately, I do think that there are plenty of value hunters out there that are willing to get involved in this market, trying to take advantage of what they see as some type of significant begin quote short squeeze.

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Given enough time we could see this market going towards the recent highs that we have seen, and perhaps even further than that. The Bank of Japan cannot do anything to tighten monetary policy for any significant amount of time due to the fact that the country is so heavily indebted.

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