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Christopher Lewis
USD/JPY

The US dollar has rallied initially during the trading session on Monday to reach towards the ¥104 level, which of course is an area where we have seen quite a bit of action at recently. The market certainly looks as if it is trying to build up enough momentum to continue going higher, but I think there is a significant amount of resistance that extends all the way towards the ¥105 level. It is not until we break above there that I would be bullish though, because quite frankly we are still very much in a major downtrend. With that being the case, I still prefer to sell short-term rallies, mainly due to the fact that there is so much stimulus coming out the United States.

USD/JPY Video 20.01.21

Traders will course be paying attention to whether or not we are going to see massive amounts of stimulus coming from the United States, and of course we have to decide whether or not that stimulus is going to be big enough to really weigh upon the US dollar longer term. The one problem with this trade of course is that we are extraordinarily low at this point in time, and as a result it is most certainly worth paying attention to the fact that we may get the occasional bounce. In fact, I believe that is essentially what we are looking at currently, and I do think that eventually people will start to focus on the trend yet again. With this, I think that eventually we could go as low as ¥102, but it is going to be very noisy and choppy trading.

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