US Dollar Continues to Levitate Against Japanese Yen

The US dollar has gone back and forth during the trading session on Thursday to show signs of continued volatility in choppiness, but it certainly seems as if the pair favors the upside. After all, the interest rate differential will continue to see a lot of strength for the greenback, which makes quite a bit of sense considering that the Federal Reserve is expected to raise interest rates multiple times between now and the end of the year. All one has to do is look at how much the 10-year note pays in interest in America as compared to the equivalent in Japan.

USD/JPY Video 18.03.22

With that being said, a short-term pullback would be nice as it could give us an opportunity to get long again. The ¥116 level underneath should be supported based upon what we had seen previously. It is essentially “market memory” coming into the picture. There is a lot of noise all the way down to the ¥115 level, which is a large, round, psychologically significant figure.

At this juncture, I believe that simply waiting for some type of value in the greenback is the best way to get involved. This pair does tend to be very impulsive in short bursts, and then go sideways again. It is all about perspective, and at this point in time, we are far too overbought to be trying to buy it up here. At the very least, we need to see this market go sideways for a while in order to work off some of the froth. The latest move has been a bit parabolic, so give it some time.

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