US Dollar Remains Elevated Against Yen

The US dollar has gone back and forth during the course of the trading session on Wednesday as we await the CPI figures on Thursday. The CPI figures will give us the next look at inflation in America, which of course is something that is on the minds of traders around the world. This will directly influence the bond market, which directly influences this pair as the 10 year yield differential between the United States and Japan tends to be the major driver here.

USD/JPY Video 10.02.22

Take a look at this chart, the ¥115 level is an area that you need to pay close attention to, as it had previously been massive resistance, and now should be support. Furthermore, the big figures like this tend to attract a lot of attention. Regardless, we are in an uptrend, and it certainly looks as if we are trying to go higher. The ¥116.50 level above is where we have pulled back from, so that is my target on a move higher. If we break down below the ¥115 level, then it is likely we go looking towards the 50 day EMA underneath, which is at roughly ¥114.50.

If we were to break down below the 50 day EMA, then it is likely that we go looking towards the ¥113.50 level. Ultimately, this is a market that I think continues the uptrend, but the question now is whether or not we go straight up in the air, or do we see some type of short-term pullback before that continues? Keep in mind that the Bank of Japan is nowhere near tightening as opposed to the Federal Reserve which will have to.

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