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Christopher Lewis
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USD/JPY

The US dollar has initially rallied during the course of the week, but then turned around to form a bit of a shooting star. Nonetheless, this is a market that I think continues to take a look at the underneath as potential support, especially near the 200 week EMA. All things been equal, this is a market that I think will continue to see a lot of noise in general, as it is a way that Forex traders will express their opinion or beliefs about potential monetary policy moves out of the Federal Reserve as tapering is something that people are paying close attention to.

USD/JPY Video 07.05.21

All things been equal, this is a market that looks likely to see a lot of back and forth in this general vicinity, and perhaps about a 300 point range. Because of this, the market is going to be difficult to hang onto for a longer-term move, so I think you will probably have to “choke up on the bat” in order to play in a tighter range.

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All things being equal, I do look at the ¥111 level as a major resistance barrier that is going to be difficult to break above. If we can get above there, then it is likely that we could go much higher, but I just do not see the momentum to do that in the short term. After all, talk about tapering out of the Federal Reserve continues to be one of the main drivers of this market to the upside but after the jobs number on Friday, there is a good chance that some of that tapering talk will disappear. I expect choppy and overall sideways trading.

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

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