US Dollar vs Japanese Yen Technical Analysis
The US dollar initially shot straight up in the air during the trading session on Monday but pulled back a bit as we may have run out of momentum. It’s interesting to see this candlestick action, because the previous two sessions were hammers, suggesting that there should be plenty of support underneath. In other words, it’s very likely that we may need to consolidate in the short term to get some type of clarity. In this scenario, it’s very likely we may grind back and forth before continuing the overall trend because quite frankly nothing has changed, other than momentum perhaps.
The Bank of Japan continues to work against its own currency by buying unlimited bonds, despite the fact that overnight it stated that “currency move should reflect fundamentals”, which quite frankly, they have been doing. ¥132.50 level should be supported, assuming that we can even get down there. On the upside, the ¥135 level has clearly caused some issues, but I do think that given enough time we will break above there because quite frankly the US dollar is the only game in town. As long as there’s going to be a need for safety, and the Bank of Japan is printing “unlimited yen”, the Japanese safety aspect of the currency market will disappear.
We are a bit overstretched, so this could be part of what we are seeing. Keep in mind that this is a market that has been very aggressive, and a lot of times you see this, there is a vicious pullback. Because of this, do not be sucked into going “all in” right away.
USD/JPY Price Forecast Video 14.06.22
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