US Dollar Continues to Find Buyers on Dips Against Yen

The US dollar initially pulled back during the beginning of the session on Tuesday, only to turn around and show signs of strength again. All things being equal, this is a market that looks as it is in fact going to continue to try to rally, perhaps trying to take out the tabletop that had formed previously. If we can break above that double top at roughly ¥116.33 level, that could send this market much higher. In fact, that point in time I would anticipate that we go looking towards the ¥118.50 level, and then possibly the ¥120 level after that.

USD/JPY Video 16.02.22

To the downside, if we were to break down below the ¥115 level, that would obviously be a negative turn of events for this pair, but the 50 day EMA is approaching that same general region and tilting higher, so it suggests that there might be quite a bit of support in that general region. If we break down below there, then it is likely that the market could go towards the ¥114 level rather quickly. All things being equal, this is a market that I think continues to see more of a “buy on the dips” type of scenario going forward, but obviously it is going to continue to be very noisy.

I do believe that it is only a matter of time before we have to make some type of longer-term decision, and as things stand, it certainly looks like we are much more likely to see a move higher. That does not mean that it is going to be easy, but that is at least how things are looking.

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