The US dollar initially tried to rally during the trading session on Wednesday in the early hours but gave back the gains in order to continue the longer-term downtrend. Ultimately, this is a market that looks likely to go looking towards the ¥105 level yet again. This is an area that has been important more than once, so it makes quite a bit of sense that we would continue to see noise in this area.
USD/JPY Video 15.10.20
That being said, the market has broken down below the level before, so I think it is only a matter of time before we reach below there again and go looking towards the ¥104 level, which of course was the recent lows. At this point, breaking down below there then opens up the possibility of a much lower level. At this point in time, the market will then go looking towards the ¥102 level, which was an extreme low at that point in time.
I have no interest in trying to buy this market, due to the fact that the Japanese bond market pays more of a return than the US one, and of course the currency markets pay close attention to that. With that being said, we continue to fade short-term rallies as they offer a bit of value when it comes to the Japanese yen. Ultimately, this is a market that I have no interest in buying due to the fact that the trend is so well ensconced, but I also recognize that the market is short-term focus more than anything else.
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