US Dollar vs Japanese Yen Technical Analysis
The U.S. Dollar has been somewhat noisy during the last couple of trading sessions as we had broken below the bottom of the uptrend line and now it looks like we are going to continue to go back and forth and try to sort out where we are going to go for a longer term move. If we were to turn around and break above the uptrend line and perhaps even the 150 yen level, then the market could really start to take off.
This is a market that gets you paid at the end of each session, via a large interest rate differential. The market continues to see traders take advantage of this overall, but at this point in time, the fear has been overriding that benefit. Ultimately, I think this is a pair that will turn around, as the central bank in Japan has already admitted its mistake.
On the other hand, if we were to break down below the 142 yen level, which is the recent low that we made a few days ago, then we will continue to go much lower. In general, this is a situation where I think we are basically moving on the idea of whether or not there is risk on or risk off behavior around the world, when frankly I think we’re in a situation where the market may be looking for its next move over the next day or two. Initial jobless claims could have a bit of an effect. Friday will be interesting because there’s really not much coming out that will directly affect either one of these currencies.
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This article was originally posted on FX Empire