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US Dollar Gets Hammered Against Japanese Yen in Safety Bid

By:
Christopher Lewis
Published: Jan 14, 2022, 15:51 UTC

During the week, we initially tried to rally a bit but at this point in time it is likely that we have seen a significant change in the attitude of the market, as the weekly candlestick is massive.

US Dollar Gets Hammered Against Japanese Yen in Safety Bid

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The US dollar has fallen rather hard during the trading week, to break through the ¥115 level handily, and then go looking towards the ¥113.50 level at the time of writing. That being said, this is a nasty candlestick and quite frankly it is probably the beginning of something kind of ugly. With that in mind, I will be looking for signs of exhaustion on any rally to start shorting, and if we break down below the ¥112.50 level, I will become much more aggressive. At that point in time, I believe it is probably only a matter of time before we would drop towards the ¥110 level and beyond. Keep in mind that although the US dollar is doing well against most currencies, the Japanese yen is considered to be the “safer” than the greenback, and that is how we are playing this out.

USD/JPY Video 17.01.22

When you look at the size of this candlestick, it is essentially wiping out the previous three weeks, and that is not a good look. It typically means trouble and most of the time you get to candlesticks like this you will get a certain amount of follow-through. With that in mind, I do not have any interest in trying to catch this market to the upside unless of course we get some type of weekly supportive candlestick like a hammer. It would be ideal to see it near the ¥112.50 level, but if it does not hold, look out below as people will be running for the exits.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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