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Christopher Lewis
USD/JPY

The US dollar rallied right off the bat during the trading session on Wednesday to slam right into the ¥104 level. This is an area that has been important more than once so it should not be a huge surprise that we have been attracted to it again. Furthermore, the 50 day EMA sits right about here as well, so all things being equal it should continue to be an interesting spot for the longer-term outlook of this pair. Everything being said, this is a market that I think is still very much in a downtrend, but it certainly looks as if it is trying to put up a fight here. The US dollar has been oversold for some time against multiple currencies, so it is possible that we could see some of that here as well.

USD/JPY Video 28.01.21

To the upside I believe that the market sees plenty of resistance at the ¥105 level so my thesis at the moment is that any significant rally would just end up being a selling opportunity. However, if we break above the ¥105 level you would have to seriously start thinking about going in the other direction, at least for a while. To the downside, if we do in fact break down, I think we probably go looking towards the ¥102.50 level, but it should be noted that the US dollar has put up quite a bit of a fight recently. The question now is whether or not it can continue to fight the massive shorting that has been going on.

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