- The early hours of Monday have seen very little movement in the US dollar as the market remains extremely tight and range-bound due to ongoing choppy behavior as there is a severe lack of momentum at the moment, but we do have an obvious trend we are working with.
- As has been the case for the past week or so, the US dollar has not moved much versus the Japanese Yen during the Monday trading session.
The primary reason for this is the lack of factors to influence the market. There were no noteworthy economic announcements on Monday, thus that is also relevant. Before making its next significant move, I believe that the US dollar is currently attempting to essentially consolidate its gains against the yen. At this point, there's a chance that we see a slight retreat, but even in that case, I believe it will still be a good time to purchase. In the meanwhile, I believe it would be an intriguing area to get involved in if we do have a substantial retreat. The 50-day EMA is located just around the 148-yen level.
152 Remains an Area I Will Be Watching Closely
We'll be keeping an eye on the 152 yen level as it has the potential to trigger further upward FOMO trading, so we'll be monitoring it closely. Remember that the US dollar continues to benefit greatly from the interest rate disparity between the two central banks. There's really no reason to consider shorting this pair as long as that remains the case. That has been the situation for most of the past few years, and I don't see it abruptly changing. Indeed, there will be sporadic selloffs.
Indeed, there will be the odd jawboning from Tokyo. Ultimately, though, the Bank of Japan is unable to increase interest rates. They just aren't able to take on that much debt in Japan with interest rates that high. The fact that they will never be able to pay off all of their debt is quite well acknowledged. Having said that, I do believe that we will eventually rise; we are simply waiting for a spark of some kind. We don't currently have it, but the trend is clearly positive, so there's no need to oppose it.
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