US Dollar vs Japanese Yen Technical Analysis
The U.S. Dollar has fallen a bit against the Japanese Yen during the early hours on Thursday as we continue to see a lot of weakness, all things being equal, this is a market that is in the process of testing a major support line. And if that continues to be the case, then we’ve got a situation where sooner or later we’re going to have to make a bigger decision.
If we break down below the 142 yen level, this market probably falls apart. If that’s going to be the case, then I think we see a lot of risk off behavior and with that being said, I think you have to also pay attention to the 145 yen level above because breaking above there would be a very bullish sign. In that environment, you could really start to see traders take off to the upside and start pushing towards the 150 yen level.
At this point, it’ll be interesting to see how this plays out, but there’s definitely something not right about the risk appetite around the world right now. And while the dollar yen pair is only part of that equation, it’s a pretty loud one at the moment. When you look at the longer term chart, you could make an argument where we could drop as low as 125 yen given enough time. Obviously, that’s not happening anytime soon, but it is something that if we get some type of panic, that could very well be the case.
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This article was originally posted on FX Empire