- The US dollar tried to rally against the Japanese yen early on Thursday, however, we have since seen a bit of exhaustion.
The US dollar tried to rally against the Japanese yen early on Thursday but has turned around to show signs of exhaustion. That’s not a huge surprise though because quite frankly we have been straight up in the air for a while and it does make a certain amount of sense that sooner or later sellers come in and push the market back down and of course buyers run out of momentum and new buyers to join them.
That being said this is a market that still favors the upside as far as an interest rate differential argument is concerned and with that being said short term pullbacks, I think are going to end up being buying opportunities. The 50-day EMA is going to offer support underneath and then after that we could talk about the 155-yen level.
Market Memory and Technical Support
The 158 yen level above is a significant target over the longer term and it’s an area that I think probably will have a lot of market memory attached to it because we had some type of intervention there but all things being equal any pullback from here probably offers a little bit of buying opportunity with the 200-day EMA perhaps being the absolute floor.
I don’t have any issue whatsoever in buying this pair on a pullback that bounces because not only do I get paid at the end of every day, but the overall uptrend still is strong. If we can break out above the recent swing high, then the 160-yen level becomes a very important level.
Keep in mind this is an area that’s significant on the monthly chart going back decades that we had just pulled back from so a couple of attempts before we can finally break out would not be a huge surprise to me at all. Regardless I don’t have any interest in buying the yen so I’m looking for buying opportunities here.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
