Technical analysis of US dollar vs Japanese yen
It seems like the market is content to just sit here and that’s not a huge surprise as there’s no real reason to sell this market short even if you don’t necessarily like it here to buy. You get paid at the end of every day through exchange and I think that’s something that people continue to hold on to and so I think that’s part of the reason why we’ve seen such resilience. After all, the Federal Reserve remains tight, and the Bank of Japan has absolutely no ability to change monetary policy in the short term.
With that being the case, I believe the underlying level of 155 yen is the bottom in the market, especially as the 50 day EMA starts racing towards it. The only real chance for this pair to fall apart would be if the Bank of Japan were to intervene again. And I think they just learned their lesson that they can only slow down the market and not necessarily change the trend. Most interventions don’t work in the long term anyway, so this shouldn’t be a big surprise.
I think at this point we are going to try to reach the 160 yen level, but it may take some time before we reach that. I view dips as an opportunity to go long every time they happen. Given enough time, this is a market that, if we break above the 160 yen level, will herald the next leg higher. Overall, I think the Japanese yen is in trouble against almost everything, not just the US dollar.
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This article was originally posted on FX Empire
