US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back slightly against the Japanese yen during the trading session on Tuesday as it looks like we may test the 150 yen level, possibly even the 149.80 level. Anything below there then opens up the possibility of a move down to the 50-day EMA. The 50-day EMA is of course, an area that I think a lot of people will be paying attention to as well. This is a common indicator to attract a lot of attention, and of course we have seen that act as dynamic support previously, so that is something that you need to pay close attention to. It’s
All things being equal, this is a situation where we continue to find some type of value that you can take advantage of. The interest rate differential will continue to favor the US dollar over the Japanese yen. And with that being the case, I think you’ve got a situation where you are just simply trying to find some type of value or some type of dip that you can get involved in because the trend is very strong. And really at this point in time, it doesn’t seem like it’s going to change anytime soon. That does make a certain amount of sense because the Bank of Japan can’t really do anything, due to the fact that the Japanese have so much debt and therefore cannot carry a higher interest rate to pay those debts off, even though they really won’t in the end regardless.
And therefore, I think you’ve got a situation where the Japanese yen will continue to be a bit of a punching bag for most currencies, not just the green bag. That being said, we will get the occasional pullback, which is exactly what we are seeing now. Above we have the 152 yen level, and I do think that’s a somewhat formidable barrier. But eventually, once we break above there, you’ll get more FOMO trading or perhaps even buy and hold trading that will continue to elevate this pair higher.
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This article was originally posted on FX Empire
