US Dollar Crashes Into Resistance

The US dollar has crashed into the ¥115 level, an area that is significant resistance based upon market memory and of course psychology. Because of this, we could see a little bit of hesitation heading into the jobs report on Friday, because of this, the market is likely to continue seeing noisy behavior, as the ¥115 level is a large, round, psychologically significant figure and an area where we have seen a lot of back and forth. That being said, when you look at the totality of the market you can make an argument for tightening, as the higher low and lower high attests to. In other words, were probably on the precipice of a move, and one would have to assume that more likely than not it is to the upside but there so much volatility out there you certainly cannot put too much faith in it.

USD/JPY Video 04.02.22

To the downside, the ¥113.50 level should be support, right along with the ¥112.50 level. In fact, if we break down below the ¥112.50 level, I think we could very well see a significant selloff. With that being the case, the market would almost certainly go looking towards the ¥110 level. To the upside, if we get a daily close above ¥115.50, it is possible that we could go looking towards the highs again and perhaps even become more of a “buy-and-hold” market if that does in fact happen. Obviously, we have some work to do before we get either one of the signals but with the jobs number coming out on Friday that could very well be the catalyst going forward.

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