US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has spent the week stabilizing against the Japanese yen as we continue to hang around the 145 yen level. We are also hanging around a trend line, so that’s worth paying attention to as well, and really at this point in time, if we can rally and take out the 147.50 yen level, it’s possible that we are going to start to recover. Quite frankly, this is a market that has gotten so far ahead of itself to the downside. It would not surprise me at all to see some type of bounce.
The market formed a hammer about a month ago on the weekly chart, and since then we’ve just been hanging about. I do think as long as things don’t change drastically, we will probably have a fair shot at a rally. However, if we were to drop down below the 142 yen level, then I think we are going to break down, perhaps down to the 138 yen level.
Keep in mind that the Bank of Japan can only tighten its monetary policy so much due to the fact that Japan is a bit of a basket case. So, with all of that being said, I think you’ve got a situation where the buyers, if they get just a little bit of momentum on their side, may start to take over again. Remember you still get paid at the end of every day to hang on to this pair.
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This article was originally posted on FX Empire