US Dollar Bounces From Significant Support Against Yen

The US dollar has rallied significantly against the Japanese yen during the trading session on Tuesday, as the ¥115 level has in fact come into the picture as support. By doing so, the market looks as if it is ready to continue the overall uptrend, something that has been very strong for quite some time. After all, the Japanese yen continues to get hammered against the US dollar based upon the idea of higher interest rates in the United States. Further exacerbating things during the session will be the fact that Jerome Powell will be speaking in front of Congress, which of course will cause a lot of havoc in the bond market.

USD/JPY Video 12.01.22

The ¥115 level is an obvious round figure that a lot of people would pay close attention to, so it does make a certain amount of sense that we have seen buyers come back in. Furthermore, it had previously been significant resistance, so therefore it makes sense that would be significant support on the way back down. This is a simple “pull back and retest” type of move, something that we see all the time. With this in mind, I like the idea of going long at this point, perhaps aiming for the ¥117.50 level, which is the next significant barrier that I can see from a historical standpoint.

At this point, pullbacks will continue to be seen as potential buying opportunities in what has been a bit of a “one-way trade” for a while. That being said, this is much safer than something like the GBP JPY, which has gone beyond parabolic, so I do prefer this pair, although it may not be as exciting.

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