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Christopher Lewis

The US dollar has initially pulled back a bit during the trading session on Wednesday but then bounced to reach towards the ¥104 level. Ultimately, this is a market that has been in a downtrend for some time, but the US dollar has gotten oversold against most currencies, so this bounce does make a certain amount of sense. He will be interesting to see whether or not the dollar can try to build some type of supportive argument in this pair, but right now one still has the look at this as a simple recovery.

USD/JPY Video 14.01.21

Keep in mind that the area between the 50 day EMA and the 200 day EMA has been very difficult to break above for any significant amount of time over the last year or so, so at this point even though we have peeked above the 50 day EMA, that does not necessarily mean that we are looking any more bullish than we have multiple times over the last year. At this point, I still do not believe that this is the beginning of a major reversal and would not be overly impressed until we clear the ¥105.50 level.

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Until then, one has to think that it is only a matter of time before we reverse back to the downside, so if we break down below the bottom of the candlestick for the trading session on Wednesday, that could be a signal to start shorting towards the bottom of the recent run, but a break above the last couple of candlesticks has me paying close attention to higher levels in order to make a longer-term decision.

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

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