The US dollar initially rallied during the trading session on Monday but gave back the gains as we continue to see a lot of volatility in this pair. It should not be a huge surprise, because we have been trying to change the overall trend, which of course is a very messy and difficult process. That being said, it is very obvious to me that the market has made a slight series of “higher highs”, so now the question is whether or not we can hold it? If we can, then it is very likely that we will see this market continue to grind towards the ¥108 level.
USD/JPY Video 23.02.21
Something that is worth paying attention to is the 10 year note, as the interest rates rising there have put quite a bit of pressure on this market to go higher. This market is moving back and forth with that market, so pay close attention to the high correlation. The Japanese yen is considered to be a safety currency, but in this case, it seems to be most importantly correlated to interest rates. Because of this, we continue to see external forces cause issues. The 200 day EMA is sitting just above where we are right now and flattening out so that is another thing to see whether or not we are going to have enough stability underneath to keep this market elevated. I do believe that longer-term we probably do, but that does not mean that it is going to be easy to ride this market to the upside. If we break down below the ¥104 level, that will negate everything positive.
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