The US dollar has gone back and forth during the trading session on Wednesday, as we continue to hang onto the same trendline we have been involved in against the Japanese yen. Ultimately, this is a situation where I think you have to look at it through the prism of whether or not the jobs number gets us moving.
The US dollar has rallied a little bit during the trading session on Wednesday, as we continue to see support below at the major trendline that we have been looking at. All things being equal, this is a market that I think continues to see a lot of noise, with the uptrend line being something that we been paying attention to for a while. With that being said, Friday is the Non-Farm Payroll announcement, and a lot of people will be paying close attention to it due to the fact that there are questions about the economy, and perhaps more importantly, interest rates.
With that being said, I think we continue to see a lot of noisy behavior between now and Friday, but once we get the announcement on Friday, I anticipate a bigger move. If we were to break down below the lows of the Monday session, then it opens up a drop down to the ¥145 level. Near the ¥145 level I think you will see the 200-Day EMA coming into the picture, and it will attract a lot of attention. On the other hand, if we turn around and break above the ¥147.50 level, then we could go looking to the 50-Day EMA, an indicator that a lot of people will of course pay attention to. Above there, then we have the possibility of a move to the ¥149.80 level, which has been a major resistance barrier in the past.
We are at a major point of inflection, so I do think that it’s important to pay close attention to the bond market, and perhaps scale into positions, not put huge positions on anytime soon. With that being the case, the market is likely to continue to be very noisy over the next couple of days, but it would not surprise me at all if we don’t do much between now and 8:30 AM New York time on Friday.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.