- The US dollar has fallen a bit against the Japanese yen during trading on Wednesday as we continue to see a lot of noisy behavior.
- Ultimately, this is a market that I think is still trying to find the bottom, and that bottom seems to be somewhere near the 142 yen level. If we can turn around and rally from here, we might be able to reach towards the 145 yen level, which you do get paid to hang on to the pair.
- So, there is that, suppose. However, we have seen a lot of damage done to the US dollar. So, I think we really have a situation here where volatility will continue to be the way forward. But if we could somehow clear the 145 yen level, then the market really could go much higher. Short-term pullbacks, I think, continue to see plenty of support near the 142-yen level.
If We Break Lower
Anything below opens up the possibility of a move down to the 140-yen level. I would expect a lot of noisy behavior. I would also expect a lot of erratic short-term moves, but we are getting close to what should, at least in theory, be a little bit of a pacing pattern. It'll be interesting to see what the market does next. I do think that if we get some type of resolution to the trade situation with several countries, that might bring in more animal spirits into the market and drive the dollar higher against the yen. Not necessarily because the US dollar is where people want to run to. I think it might be people running from the Japanese yen. And you would see probably bigger moves and pairs like the New Zealand dollar against the Japanese yen, the British pound against the Japanese yen, et cetera.
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