US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar initially fell significantly over the course of the trading week, reaching the 155 yen level before bouncing back quite dramatically. It’s probably worth noting that Friday’s jobs number was much stronger than expected. And that’s why people will continue to look at it through the prism of the interest rate differential and the fact that the Federal Reserve is very unlikely to ease monetary policy anytime soon. I think at this point any short-term pullback is a great buying opportunity.
And if we get below the bottom of the candlestick, then the 152 yen level is an area where there was resistance before. Market memory should therefore come into the picture again. Overall, I think this is a market where you look for value every time it drops, you get paid the interest rate differential at the end of the day and institutional traders will continue to pay close attention.
I wouldn’t be interested in shorting this pair in the short term and the market would have to drop below 150 yen for me to become negatively involved. And even then you have to be somewhat careful, because you pay the swap at the end of the day. So with this I remain bullish. I think we will eventually break above the 158 yen level and then move to the 160 yen level where a huge battlefield awaits.
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This article was originally posted on FX Empire
