Christopher Lewis
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The US dollar has rallied a bit during the course of the trading session on Thursday, only to turn around and sell off to form a less than enthusiastic candlestick. That being said, the candlestick on Wednesday was so massive that it should not be a huge surprise that we need to digest some of those parabolic gains. Furthermore, the ¥110 level is a large, round, psychologically significant figure that a lot of people will be paying attention to. However, we have passed through that level before to reach the ¥111 level, and therefore I think that will be the longer-term target eventually.

USD/JPY Video 14.05.21

This pair does tend to be very choppy and then suddenly very impulsive. I think we are going to enter more choppy behavior, but it is obvious that the buyers are a bit more aggressive than the sellers at this point in time. As long as that is going to be the case then there is no reason to short this market. If we do pull back, I would be interested somewhere near the 50 day EMA or even the ¥109 level. However, if we just turn around a break above the ¥110 level, then the market is likely to go looking towards the ¥111 level.

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All things being equal, this is a market that I think favors the upside mainly because the Japanese yen is being sold off so aggressively. It is not necessarily that I like the dollar here, it is just that I really do not like the Japanese yen. In fact, most of my trades have actually been in NZD/JPY, AUD/JPY, and even the CHF/JPY.

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