US Dollar Continues to Grind Against Japanese Yen

The US dollar has fallen during the trading session on Wednesday to reach down towards the 50 day EMA. We had seen a certain amount of support in that area, thereby causing the market to bounce again. At this point, it looks as if the market is trying to figure out whether or not we will continue to have enough momentum to go higher. The 50 day EMA is of course an indicator that a lot of people pay attention to, so it is worth noting.

USD/JPY Video 20.01.22

To the upside, the ¥115 level will be important as well, as it is a large, round, psychologically significant figure and an area where we had seen a bit of selling pressure as of late. If we can break above there, not only would we break above the top of the shooting star that formed just Tuesday, but we would also clear an area that previously had been thought of as a significant barrier. Because of this, I think that more money would flow into this market if that does in fact happen, and thereby could cause a little bit of a rush.

To the downside, if we break down below the 50 day EMA, we will probably go looking towards the bottom of that hammer from last Friday to see whether or not there will be support for buyers in that general vicinity. With US rates rising, it does make a certain amount of sense that we will continue to see the US dollar strengthen against the Japanese yen.

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