The US dollar initially fell against the Japanese yen on Friday but then turned around to show signs of resiliency again. Quite frankly, this is a pair that does not seem like it has anywhere to be in the short term, and therefore I think you probably will do better off looking at other markets for trading opportunities. However, we are pressing the ¥104 level, an area that has been a bit difficult for the market to break above significantly for a while now, and of course we are sitting at roughly the 50 day EMA, which also has attracted a certain amount of attention. That being said, I think that if you can see signs of exhaustion on a short-term chart, you may have an argument for taking a trade to the downside.
USD/JPY Video 18.01.21
As far as buying the dollar against the yen is concerned, I do not really have any interest in doing so in the short term, but I do recognize that if we broke above the ¥105 level, and perhaps even the 200 day EMA which is just above there, then you might have an argument for a complete turnaround in the trend. We are at extreme lows, and quite frankly we have been lower before. In other words, I think the market is trying to figure out what to do next but with the massive amount of stimulus coming out the United States it could very well continue to weigh upon the greenback overall, and therefore continue the longer-term downtrend. As things stand now, if we do break down, we could go looking towards the ¥102.50 level.
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