The US dollar fell slightly during the trading session on Thursday, as we continue to see a lot of volatility, and at this point, the market is trying to figure out where to go next. When you look at the longer-term chart it is likely that the longer-term consolidation triangle will be a major influence. Looking at this chart, the ¥107.50 level will continue to be crucial, as it has been an area that we have gone back and forth from multiple times.
Furthermore, the 50 day EMA is sitting just above and the 200 day EMA. Both are basically flat right now and to sell it suggests that we are going to run out of momentum and simply drift sideways for some time. I do not have any trade here; I think that this is a market which is a great way to lose money unless you are willing to go back and forth on a five-minute chart or something to that effect.
If we can break down below the ¥106 level, it is likely that we will go to the ¥105 level. On the other hand, if we were to break above the 200 day EMA then we could go looking towards the ¥110 level, but it is going to take a while to get there. With this massive amount of choppiness and difficulty, this is probably one of my least favorite pairs right now and I would not place a trade in this market for a few months. However, if the market breaks down, then I will be looking to short other currencies against the Japanese yen such as the NZD/JPY pair, CAD/JPY, and others. On the other hand, if the market turns around and breaks to the upside, I will probably look for a move higher in those pairs.
Ultimately, we will get some type of impulsive move in this pair that we can follow but right now it is just a simple chop-fest that will grind your account to pieces if you are not overly cautious. At this point, the market is going to continue to be one that you can only trade from short-term moves and it is possible to simply use as a secondary indicator as I outlined previously.