US Dollar Bounces After Selling Against the Yen
The US dollar remains noisy, as the markets continue to price in interest rate differences, and risk appetite.
USD/JPY
The US dollar continues to be quite noisy against the Japanese yen as we fell pretty significantly to kick off the trading session on Monday. That being said, we have turned around to show signs of resiliency, and I think a lot of what's going on here comes down to the idea of interest rates in America dropping but the interest rate differential still favoring the United States well over the Japanese yen.
If we can break above the high on Friday of last week, that opens up a move to the 156-yen level, possibly the 158-yen level. All things being equal, this is a market that I have no interest whatsoever in shorting, but I do recognize that we will see some downward pressure eventually.
Upward Pressure and Potential Targets
The 200-day EMA underneath sits at the 152.50-yen level and then of course the 152-yen level has been important as well. Ultimately, I think this is a market that will eventually try to do everything it can to push to the upside with the 152-yen level being the hard floor.
The 158-yen level above is a significant barrier and ceiling that I think a lot of people are going to struggle to break out and above. If we can break above there, the 159-yen level then will be the next target.
Ultimately, this is a market that I think continues to see a lot of upward pressure and I do think that each time the market dips it offers a certain amount of opportunity. If we were to turn around and break down below the 152-yen level then the whole thing could fall, but really at this point, I think you still have to look at this through the prism of a market that pays you at the end of every day to own.