- The US dollar initially pulled back against the Japanese yen during the trading session on Friday, but at this point in time, have turned around to show signs of strength.
- That makes a lot of sense considering that we get paid at the end of every day to hold this pair.
- And of course, we recently, just a couple of days ago, in fact, had seen a major breaking of a ceiling in this market in the form of the 152 yen level.
With that being the case, I think you've got a real shot at this market taking off to the upside and the way it behaves on each dip tells me there are plenty of people willing to get involved and looking to pick up a little bit of value when it comes to the greenback. If we can break above the top of the candlesticks of the last couple of days, then it opens up a move to the 155 yen level, which has been my target for a while. The 152 yen level should continue to be supported.
Plenty of Support Under Here
But even if we break down below there, I think there is an even more interesting support level near the 150 yen level where the 50 day EMA is hanging about. The interest rate differential continues to be huge in this pair. And of course, there's also the possibility that the Federal Reserve may not be cutting rates this year, at least not as long as inflation stays as sticky as it has been.
And that of course has continued to drive the value of the US dollar much higher. With that being said, I continue to buy dips and I do believe we will get to the 155 yen level over the next several weeks. It will take a certain amount of time to get there, and of course a lot of effort. Ultimately, there is no interest on my part to get short of this market in the foreseeable future.
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