- The US dollar initially tried to rally during the trading session on Wednesday breaking above the 150 yen level and at one point looking very strong.
- However, we’ve turned around and fallen pretty significantly as the US dollar has been hammered against most things.
- That being said, I think it’s probably only a matter of time before we have to make a decision about the yen because of its low interest rate.
- Remember, you still get paid to hold this pair.
And if we can break back above the highs of Monday, I think that could be a very positive sign. That being said, if we break above there, the 200 day EMA gets targeted to the 152 yen level. Breaking above there opens up the possibility of a move to the 155 yen level. On a breakdown below the hammer from the Tuesday session, that’s obviously a very ugly turn of events, and it could open up a move down to the 145 yen level.
Breaking Down Possible, But Difficult
I’m not necessarily calling for that, but it certainly looks very possible. Right now, it seems like we’re just trying to sort things out. And that makes a lot of sense with all of the tariffs and everything else flying around and of course, interest rates in America plummeting, but they’re still well above Japan.
The Japanese yen looks soft against most things except for the dollar. So, this shows, I think more than anything else, the dollar weakness, which all you have to do is look at the euro against the dollar to see a pretty good example of that. Ultimately, USD/JPY is a pair that is looking at a lot of different things and could very well end up being noisy nonetheless.
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