- The US dollar recently gained ground during a trading session on Wednesday, drawing attention to the USD/JPY pair.
- The market, according to some, was moving too quickly for its own benefit.
- There is more to this story than meets the eye, so don't be deceived by this tiny setback.
The 146 level, which is emerging as a potential support level, is currently the focus of market experts. It's interesting to note that this used to be a strong resistance. So what changed the dynamics, and why? Recently, the market emerged from a period of stabilization and soared to new highs. This event makes it seem likely that this upward trend will continue. However, what is fueling this bullish attitude, and momentum is that you get paid to own this pair via swap.
Given the current state of the economy, it appears unlikely that any decline in this currency pair is significant enough to cause insomnia. Instead, these pullbacks can simply be encouraging trading chances. The idea that the US dollar might eventually reach the 150 mark is not absurd. Some people even think it might just blow straight through it. For the time being, the initial goal is 150. On the downside, 144 seems to be the market's stable floor. It may have a more significant correction if it breaks below this level.
Be Patient
Of course, it's important to remember that there are occasionally deeper corrections. But for those with patience, these times could offer chances to get "discounted" US dollars. The general assumption is that this market will eventually continue its upward trend, provided that the Federal Reserve doesn't abruptly lower rates and the Bank of Japan doesn't change its monetary policies. To summarize, there doesn't appear like a strong case to try to "short" this market currently.
All yen-related currency pairs share this view, with the US dollar standing out amid uncertain market conditions. Therefore, even though the USD/JPY pair may go through ups and downs, the overall view is still positive for those who exercise caution. In other words, don’t jump in with huge positions, and do not try to “pick the top” like so many retail traders are guilty of attempting. This trend will continue from everything I see, and until fundamentals change, there is no way to fight this momentum.
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