US Dollar vs Japanese Yen Technical Analysis
The US dollar has been all over the place against the Japanese yen during the last 24 hours, which makes sense considering we had a major shock in the CPI numbers on Thursday. And then simultaneously, the Japanese decided to come in and intervene. However, this intervention will fail eventually. They always do. And we’ve seen this play before. Buyers have come back in to pick up the US dollar, and since then the PPI numbers came in hotter than anticipated. So, we’re right back to where we were 24 hours ago. The only variable now is going to be, Will the Bank of Japan defend the yen?
They probably will to a point. But quite frankly, when they do this, it’s more or less to slow down the relentless pace of a currency pair. Reversing it really isn’t open for debate unless it’s a coordinated attack by several central banks. The 50 day EMA has offered significant support, as has the ¥158 level, an area the previously had been resistance.
So, it all ties together for a pullback and a bounce. You do get paid at the end of every day to hang on to this position, so I obviously don’t want to be short. And I do think that eventually we will break back above the ¥160 level. If we do, I suspect that there will be a lot of “FOMO trading” in the market, as traders try to jump on to what’s been such a reliable uptrend.
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This article was originally posted on FX Empire
