Christopher Lewis
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The US dollar has fallen initially against the Japanese yen during the trading session on Wednesday but looks as if it is finding a little bit of support exactly where you would expect it based upon previous trading action.

USD/JPY Video 15.04.21

After all, we have seen a lot of noise in this general vicinity, so it does make a certain amount of sense that traders would come back in and try to pick it up “on the cheap.” The market had gotten way ahead of itself, so a pullback to this area of consolidation made the most sense, and now it looks as if we may be able to start taking off again. If that is going to be the case, I believe that we will probably revisit the highs sooner rather than later.

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Regardless of what happens next, I am not willing to sell this market, because quite frankly it is far too bullish from a longer-term standpoint. Ultimately, I think this is a market that will find its way back to the ¥111 level, possibly even all the way to the ¥110 level. Interest rate differentials between the two countries continue to be a major factor, so that cannot be stressed enough in this scenario. After the big move that we had previously seen, it does make quite a bit of sense that we would continue to see a lot of noise, but ultimately, I do think we are in a scenario that the market needed to calm down and find a little bit of stability, which is something that I think has happened over the last couple of weeks.

For a look at all of today’s economic events, check out our economic calendar.

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