US Dollar Hanging Around ¥115 and Yet Again

The US dollar has hung around the ¥115 level in general, at least over the last three sessions or so. Ultimately, the 50 day EMA rising from here does suggest that there should be a certain amount of buying pressure in this area. Furthermore, it is a large, round, psychologically significant figure, so that of course has its part of play here as well. Add to the fact that it was Presidents’ Day in the United States, and we really had nowhere to go.

USD/JPY Video 22.02.22

If we were to break down below the 50 day EMA, then we could go looking towards the ¥114 level, an area that has been noisy in the past. On the other hand, if we can break above the highs of the trading session on Friday, that would kick off a potential move towards the ¥116.33 level, as it would be the breaking of the top of an inverted hammer.

When you look at the overall trend for this pair, we have been in an uptrend for ages, so one has to look at it through that prism. Yes, we recently formed a bit of a double top, but if we break above that region, then it will really bring in a flood of buying pressure as there had been such a pushback near that ¥116.33 level. Given enough time, I think that does happen due to the interest rate differential between the two countries, but there is a little bit of a drag to the downside due to the fact that the Japanese yen is considered to be a safety currency, and obviously there are a lot of concerns around the world at the moment.

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