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Christopher Lewis
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USD/JPY

The US dollar has initially tried to pull back during the trading session, but it certainly looks as if the ¥109 level underneath will continue to be somewhat supportive, and therefore I like the idea of looking for support in that general vicinity that we can take advantage of. You can clearly see that we have bounced from there recently, and of course there was a lot of noise in that vicinity previously. Furthermore, you need to keep in mind that this pair does tend to move with risk appetite, going higher when there is more, and going lower when there is not.

USD/JPY Video 13.04.21

The 50 day EMA currently sits at the ¥108 level, and I think that is another area that longer-term traders will be looking at. We have clearly broken through a ton of selling resistance as of late, and we may just need to work off some froth here. The US dollar of course has a lot of noise around it right now, so you should keep that in mind. The interest rate differential between the two currencies also has a major influence on what happens next, so if the yields in America continue to rally, that could be reason enough to see this market skyrocket. That has clearly been the case as of late, so it certainly should be paid close attention to.

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At this point, I think that you can expect a lot of noisy trading, with a more or less upward bias over the longer term. It in general, this is simply a matter of timing more than anything else as we have clearly changed the overall attitude of the market in the last several months.

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