US Dollar Pulls Back Against Yen

The US dollar has pulled back significantly against the Japanese yen during trading on Friday as we continue to see a lot of concerns coming out of geopolitics, inflationary headwinds, and general growth slowing. That being said, the US dollar is probably going to be a bit more insulated against this type of movement than most other currencies, so although I would anticipate that this market could pull back a bit, I think it is somewhat limited.

USD/JPY Video 07.03.22

In fact, I see the 50 Day EMA underneath as a potential support level, and therefore would not get aggressive to the downside. I would look for buying opportunities if the market does in fact stabilize, which is something that remains to be seen. The interest rate differential between the two does favor the US dollar, but it is probably shrinking as I record this. That being said, it is still significant enough to favor the US dollar unless, of course, we get some type of massive meltdown in the system.

If we do break down below that 50 Day EMA, then I will be looking towards the ¥113.50 level as a potential support barrier. Anything below there could spell trouble but I still believe that you get more mileage shorting something like the AUD/JPY pair, or perhaps the GBP/JPY pair – which has fallen quite significantly during the session on Friday. All things being equal, I think you will get an opportunity to pick up value, but you need some type of stabilization before you put money to work. Until then, you can use this pair as a barometer for the rest of the ye pairs.n-related

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