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US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar initially fell during the course of the training week, only to turn around and show signs of life against the Japanese yen. If we were to break above the ¥147.80 level on a daily close, then I think you will see the Japanese yen continue to break down against not only the US dollar, but probably even other currencies. All things being equal, this remains a “buy on the dips” situation, and therefore I think we have a bullish market that’s just looking for another reason to go higher.
That reason might be the next interest rate announcement coming out of America, but there are a lot of questions as to whether or not we are going to see an interest rate hike, or if it will just simply be a situation where we have a hockey statement. Either way, it looks like the US dollar will continue to go higher.
If we break down below the bottom of the candlestick for the week, that could be a very negative turnaround, opening up the possibility of a move to the ¥142.50 level. That is the “floor in the market” at the moment, so therefore I think that the market breaking down below there would have me rethinking the entire situation. That being said, I don’t think that happens anytime soon, and we are more likely to test that ¥150 level. Once we break that, then we could threaten the all-time high, and perhaps even run on an even bigger leg higher, perhaps to the ¥155 level.
All things being equal, I do think that the “buy on the dip” strategy continues to be the way forward, despite the fact that the Bank of Japan Gov. Ureda recently tried to talk the market back down.
For a look at all of today’s economic events, check out our economic calendar.
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