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Christopher Lewis
USD/JPY

The US dollar has initially rallied against the Japanese yen for the week, but as you can see, we have rolled over and it looks as if we are reaching towards the ¥106 level again. This area has formed a short-term “double bottom”, so that of course is a level that is worth paying attention to. If we break down below the ¥106 level, the market is likely to go looking towards the ¥105 level rather quickly.

USD/JPY Video 13.07.20

Below there, we then see a move towards the ¥102.00 level. With all that being said, I think it is still probably easier to fade rallies than it is to try to buy this market on support. This is because the Federal Reserve is doing what it can to weaken the US dollar, and as a result it will more than likely eventually get what it wants.

However, you should keep in mind that eventually the Bank of Japan will lose it since humor when it comes to this situation and get involved. I anticipate that is probably closer to the ¥100 level, so we could go quite a bit lower. For what it is worth, there is a massive triangle on the chart, and that triangle measures for a move down to about ¥94, which would be quite impressive to say the least. I do not know how much faith I put into it right now, but it is something to think about for the longer term. I think at this point it is going to be difficult to be bullish of this pair.

For a look at all of today’s economic events, check out our economic calendar.

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