US Dollar Bounces From Big Figure

The US dollar has initially pulled back during the trading session on Monday to reach towards the crucial ¥115 level. By doing so, it does suggest that we have a longer-term continuation of the uptrend trying to be formed, but you should also pay close attention to the double top that has formed near the ¥116.33 area. Quite frankly, I do not know that it holds but it is worth paying attention to due to the fact that if we do break above there, it would be a very strong sign indeed. At that point in time, the very likely that we could go looking towards the ¥120 level over the next several weeks.

USD/JPY Video 15.02.22

To the downside, the ¥115 level should continue to be important, but if we were to break down below there it is very likely that we could go looking towards the 50 day EMA, and then eventually towards the ¥114 level. The pair does tend to move based upon risk appetite, and with all of the nonsense going on at the Ukrainian border, we could see a lot of choppy behavior.

As a market that gets thrown around by the latest headline, I think the only thing you can probably count on is that we will move quite violently in various directions, so I would be very cautious about your position size, because that is the one thing you can do in a situation like this, take advantage of the ability to scale back your position size. In general, I do think that the US dollar does fairly well, but the Japanese yen is a bit of a conundrum in the sense that it is also a major safety currency.

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