US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has rallied a bit during the trading week against the Japanese yen, reaching toward the crucial 150 yen level, but pulling back about 50 points shy of it. At this point, the question now becomes whether or not we have continuation, and I think that continuation would be a move above the 150 yen level for longer term traders to truly take advantage of this. We tested the previous uptrend line, and it did in fact offer resistance. So as things stand right now, it looks like we are going sideways. That being said, a break above that 150 yen level could bring a flood of new money into this market.
It is worth noting that the previous weekly candlestick was a hammer and that of course will attract enough attention on its own, but whether or not we get follow through, that will be the real question. Because of this, I postulate that the next week is probably one that you will be looking to simply observe, not necessarily get aggressive one way or the other. You do get paid to hang on to it, but the swap may not be enough if we continue to see the massive carry trade unwind. There’s a lot of noise around this at the moment and perhaps even more nonsense. So, you do need to be cognizant of that.
All things being equal, I think this is a market that will eventually have to make a bigger decision. And I would say that if we break down below the bottom of the candlestick from the previous week, that would be a horrible sign. At that point in time, I would probably start thinking that the trend is broken completely and that we are going much lower. Until then, we still have some fight left in the greenback.
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This article was originally posted on FX Empire
