US Dollar Continues to Hang Around the ¥115 Level

The US dollar initially tried to rally during the course of the trading session on Monday to try to break out, but quite frankly we are simply going sideways in this general vicinity. The ¥115 level of course is a significant psychological figure, as well as an area that we have seen a lot of noise in both directions. That being said, it is very likely that the 50 day EMA underneath will continue to offer a bit of support, and the market looks like its tightening up in general. That being said, the market will be driven mainly by interest rate differential, as we have seen a lot of carry trade action in the Forex markets as of late.

USD/JPY Video 24.02.22

If we do break down from here, I suspect that we probably do not go any lower than the ¥113.50 level, based upon the recent price action, and I think anything close to that will be a nice buying opportunity. Alternately, we have a short-term resistance barrier near the ¥115.33 level, meaning that if we break above there, I think is very possible that we have a move towards the highs again at ¥116.33 above. If we can clear that, then it is likely that the market is going to go much higher, becoming more or less a “buy-and-hold” type of situation. At that point in time, the USD/JPY pair could go as high as ¥120. Obviously, we need a little less concern out there from a psychological standpoint to have that carry trade move take off in that manner.

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