US Dollar Continues to Find Buyers

The US dollar has initially fallen during the Japanese session against the home currency, but then turned around during the European session to show signs of life. At this point, we have ended up forming a bit of a hammer and it looks like we are ready to go higher over the longer term. We obviously have a double top above at the ¥116.33 region, so that could be a major barrier that will be difficult to overcome. If we do break above there, then it is likely that we get more of a “buy-and-hold” type of situation.

USD/JPY Video 28.02.22

The carry trade continues to be popular with Forex traders around the world, and of course the interest rates that you are finding in the United States are much higher than Japan, so that of course helps traders take advantage of the situation that most of the world finds itself in – that there is no interest to be had in most assets. Because of this, there should be a bit of a bid in this market going forward, and if you look at the longer-term structure, you could even make an argument for an ascending triangle be informed. Because of that, it makes quite a bit of sense that we would see buyers coming back in any time they get an opportunity to pick up a little bit of value.

I have no interest in shorting this market, and even if we break down below the 50 day EMA, it is very likely that we could go looking towards the ¥113.50 level where we should see even more support.

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