US Dollar Trying to Stabilize Against Yen

The US dollar has gone back and forth during the course of the trading session on Monday, as we are trying to stabilize with an eye on the ¥113.50 level. This is an area that should continue to offer support, but quite frankly it will be interesting to see whether or not we can hang on due to all of the fear that is out there. If you been following my analysis on this pair at FX Empire, you know that I suggested that perhaps this pair may “be less bad” than a lot of other yen related pairs, due to the fact that the US dollar is of course considered to be a safety currency as well.

USD/JPY Video 25.01.22

With that being said, I do think that a bounce from here makes a certain amount of sense, but I am not looking for an explosive move. On the other hand, if we were to break substantially below the ¥113.50 level, meaning that we close below there on at least a four hour chart, then it is possible that we could drop towards the ¥112.50 level, an area where I would expect to see quite a bit of support based upon previous action and of course the fact that the 200 day EMA is racing towards that level.

All things been equal, this is a pair that is highly sensitive to risk appetite and the bond market. Because of this, you need to keep in mind that this pair does tend to be very choppy for the short term, only to turn around and show big moves suddenly. All things being equal, this is a market that I do not like getting too cute with, I simply try to follow the longer-term trend, in this case to the upside.

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