The US dollar has broken down significantly during the trading session on Thursday, slicing through the bottom of several hammers that had formed over the last several days. At this point, the ¥112 level is an area that seems to be crucial for traders to pay attention to as it is such resistance that it’s difficult to imagine that we are going to simply slice through there. Ultimately, the market could go down to the ¥108 level underneath, perhaps even further. After all, the Japanese yen is a bit of a safety currency, so keep that in mind if we get a lot of negative headlines.
USD/JPY Video 27.03.20
Ultimately, we turn around a break above the ¥112 level eventually, the market then goes looking towards the ¥114 level after that. The candlestick is a relatively negative, and therefore I think that there are a lot of people looking at this as an opportunity to start selling again, and perhaps continue the overall bounce back and forth that we have seen. The pair tends to be very sensitive to headline risks, and the new unemployment claims in the United States of course will have shocked some people. That being said, there is still a huge demand for US dollar so I think that this pullback will probably be somewhat limited in its scope, and I’m not expecting some type of major meltdown. Ultimately, it’s a short-term selling opportunity followed by a somewhat medium-term buying opportunity. I do not want to put in a huge position though, because of all of the volatility.