US Dollar vs Japanese Yen Technical Analysis
The U.S. dollar plunged against the Japanese yen during the early part of the session on Thursday but has turned around a bit as the advanced GDP numbers came out at 2.8% instead of 2% in America, suggesting that the Fed still will have to remain tight for a while. If that’s going to be the case, that throws the interest rate differential shifting into disarray and therefore, we have a situation where the bounce makes a lot of sense.
We’ve seen a lot of panic selling as of late and it certainly makes a certain amount of sense that this is a market that will continue to be noisy, but I also recognize that we have a situation where we had bounced from the 200 day EMA, so technical traders just in that reasoning will more likely than not continue to see a lot of interest in this as it’s not only catching a little bit of a falling knife but also at an area where it had gotten so cheap that I think it made sense to get involved.
Ultimately this is a market that I think is probably going to try to get to the 155 yen level but keep in mind there has been a massive amount of technical damage done so it’s more likely than not it’ll be more of a grind as the market has seen so much pressure. Ultimately, I still don’t like the idea of buying the yen, as the interest rates will continue to favor the upside here.
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