The US dollar has seen a bit of strength against the Japanese yen during the trading session on Monday, although it should be said that it was Martin Luther King Jr. Day in America. That being said, the move actually happen before US trading, so it does make a certain amount of sense that perhaps technical traders have stepped back into the market in order to pick up this market after a nice pullback.
USD/JPY Video 18.01.22
The size of the candlestick was rather impressive, but at the end of the day it is interesting that the market bounced exactly where it did. Friday ended up showing signs of stability as we formed a nice looking hammer, which also happened to be right there at the 50 day EMA. Because of this, it looks as if we tried to recover from the bigger pullback, and it certainly looks as if there is a little bit of follow-through in both Europe and Asia during the Monday session.
At this point, the market is very likely to see a lot of noisy behavior, but it looks like we are going to see a continuation of the longer-term uptrend that we had seen previously. Because of this, I think the market is more likely than not going to continue to the upside, with the ¥115 level being an area of interest, as large, round, psychologically significant figures come back into the picture and throw things around. Nonetheless, we are still very much in an uptrend, so I think value has come back into the picture for longer-term traders.
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