US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has had a rough trading session again, as we have been all over the place on Friday. This is forming a negative candlestick for the week, as we find ourselves testing a significant trendline. At this point, if we can continue to see downward momentum, we could find the pair dropping down to the ¥145 level. After that, then we could be looking at ¥142.50, an area that had been important on daily charts.
On the upside, we are going to need to take out the ¥149.80 level to get a signal for longer-term traders to go into the market and start buying, so we have a lot of work to do in the meantime. I would anticipate a lot of noisy behavior more than anything else, and therefore I think it’s is a situation where we are still very much in a bullish trend, but there are a lot of noises out there that continue to cause headaches for traders in general. I like the idea of buying dips, at least until we break down below the 50-Week EMA. Furthermore, we are going to have to pay attention to the jobs number next Friday, because that could also have a lot to do with what we see next in this pair as well.
In general, I think this remains a market that you need to be very cautious with, but I still am not convinced that it’s time to start shorting the US dollar against the yen. The interest rate differential is shrinking, and that does help the end, but quite frankly, I believe that the Bank of Japan will hurt the yen sooner or later, it seems to be there modus operandi.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.