Christopher Lewis
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The US dollar has pulled back a bit during the trading session on Thursday, as we are now below the ¥109 level. By doing so, we are in the midst of the previous consolidation area that cause so much noise and bullish pressure in this market. By doing so, it looks as if the market is trying to build a bit of a base up to continue the longer-term uptrend. At this point, if we were to retake the ¥109 level, then I think we will continue to go higher.

USD/JPY Video 16.04.21

To the downside, if we were to break down below the ¥108.35 level, then it is possible that we could go to the 50 day EMA. The 50 day EMA currently sits at the ¥108 level, and that should in and of itself be supportive as well. Regardless, I do not have any interest in trying to short this market, because it has been so strong as of late. While yields in America have calmed down quite a bit, they are still light years away from the low level that Japan sees, and therefore I think it does make quite a bit of sense that we would have plenty of buyers on these dips. Furthermore, the US dollar is starting to pick up a little bit of a bid against multiple currencies again, so that could also come into play.

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To the upside, I believe that the market will probably target the ¥111 level again, but we had gotten so overbought that it is not a huge surprise that we needed to do this. This is simply a dip that people will be looking to take advantage of, as many people have missed the entire move up.

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