US Dollar Pulls Back Heading Towards the Weekend

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back during the trading session on Friday as the ¥122.50 level has been very difficult to overcome. At this point, we are so overextended that it is basically impossible to imagine we can continue to go higher without some type of pullback. Markets do not go parabolic forever, so one would have to think that as we head into the weekend, it makes sense that people are willing to take profit.

The 122.50 level is a bit of a barrier, as this market tends to move in 250 point increments. If we do pull back from here, then the ¥120 level could be a target that people look towards on a pullback for support. The ¥120 level offers support, but if we break down below there, we could go looking towards ¥117.50 level, where the 50 Day EMA is currently reaching towards.

I have no interest whatsoever in trying to short this market, even though I understand that we could get a significant pullback and that it could be rather brutal. That being said, the market is likely to see a lot of noisy behavior, but I also believe that there are a lot of people that will be wanting to get involved in this market as it is so clearly bullish. Keep in mind that the interest rate differential between the two countries has been rather stringent, but during the early Friday hours, it should be noted that the Bank of Japan did not step in to keep yields lower at a very crucial level.

USD/JPY Technical Analysis Video 28.03.22

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