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United States Dollar Breaks Down Against the Yen From an Elevated Level

By:
Christopher Lewis
Updated: Mar 30, 2022, 14:12 UTC

The US dollar has fallen against the Japanese yen during the trading session on Wednesday as gravity is finally starting to take hold.

United States Dollar Breaks Down Against the Yen From an Elevated Level

In this article:

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen a bit during the trading session on Wednesday as we have finally started to acknowledge the existence of gravity. The market has been so overbought that this should not be a huge surprise, and I do think that a much more significant pullback is on the horizon. This does not mean that it happens right away, but it does suggest that we are starting to recognize the situation has been overdone. Ultimately, this is a market that will more than likely go looking towards the ¥120 level, but it will not get there in a straight line under most circumstances.

On the upside, the ¥125 level has been a bit of a barrier, and that should not be a huge surprise considering that it was so important on the monthly chart. Longer-term charts have shown the ¥125 level to be far too much to overcome so I anticipate that if you look at shorter-term charts, you may see signs of selloff pressure every time we rally for the short term. Longer-term, we will have to see how we behave at the ¥120 level, or if we can break above the ¥125 level which of course would be an extraordinarily bullish sign.

The interest rate differential favors the US dollar, but not to this point. The 10-year note had been so oversold that it was applying pressure to this market to the upside, so it now looks as if we will probably do some type of recovery in both markets as we have been so overextended for so long.

USD/JPY Price Forecast Video 31.03.22

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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