- The US dollar initially plunged during trading on Friday, as we saw a lot of concern heading into the jobs number.
- We have seen quite a bit of upward pressure, and it now looks like we are trying to do everything we can to continue to chip away at the major resistance barrier above that major resistance barrier.
The Resistance Area Above
The ¥152 area is an area that has been staunchly defended. I think at this point in time, if we do in fact break above the ¥152 level, then the market could see quite a bit of momentum. The FOMO trade would almost certainly be a situation where we would probably go looking to the ¥155 level. Short term pullbacks continue to get bought into.
But if we do break down from here, I think the ¥150 level is an area that we should see plenty of support for as well. The 50 day EMA sits just below there, and I think that comes into the picture. Also keep in mind that the Bank of Japan is trying to do everything it can to protect the yen. In fact, there is a very real possibility that the Bank of Japan has been silently intervening in the markets, something that they are known to do occasionally.
But really in this environment, it doesn't make any sense that you would own the yen, and therefore it's likely that we continue to see a lot of other currencies beat up on the yen. And in fact, it's not just the dollar. Some of the higher yielding currencies around the world, of course, are having a field day as well. I prefer to buy dips. I do think eventually we break higher and go looking to at least the 155 yen level, if not much higher as the market continues to see a lot of interest rate differential payments helping hold this as well. I currently hold this USD/JPY pair, and will continue to look for buying opportunities that we have seen on Friday.
Ready to trade our daily Forex forecast? Here’s a list of some of the best regulated forex brokers to check out.