- The US dollar initially fell during the trading session on Thursday but then found enough support near the 50-day EMA to really get things moving and open up the possibility of a rebound.
- The 50-day EMA sits right there at the 146 yen level as well, and I think that is something worth noting and maybe even something you can use in your analysis.
Ultimately, this is a market that given enough time, I believe probably opens up the possibility of a move towards the 200 day EMA, which sits right around the 148 yen level. This is how I have been approaching it. The market participants out there will continue to look at this through the prism of interest rate differential over the longer term, and with so much foreign capital flowing into the United States, it does make a certain amount of sense that the US dollar benefits against the Japanese yen specifically. That being said, if we break the 148 yen level, it then opens up the possibility of a move to the 149 yen level where we had peaked recently. I would anticipate a lot of issues in that area if we can get there.
On a Move Lower
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A breakdown below the 50 day EMA opens up the possibility of a move down to the 144 yen level, but that's not necessarily something that I'm looking for at the moment. I recognize this is a market that will probably continue to be very noisy and choppy, but that is typical for this pair regardless.
So with that, I like this buying of the dip as we had tried to break out, but overall, I think this is probably more of a grind to the upside and it will take significant time to reach its destination.
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