The US dollar has gone back and forth during the trading session on Wednesday as we continue to go back and forth around the ¥108 level for the second day in a row. The 50 day EMA is also sitting right around this area as well, so I think there is a certain amount of technical support in this area. Furthermore, the ¥108 level has been important in the past, but I think this is probably minor support, the question now is whether or not traders are simply looking to “buy the dip” after we have seen such a massive move to the upside.
USD/JPY Video 22.04.21
However, if we break down below the lows of the Wednesday session then you have to “reset” and start looking at the ¥107 level as a potential buying opportunity, especially as the 200 day EMA is racing towards that area. All things been equal, this is a market that I think is trying to find a certain amount of stability before traders get involved again. In general, I think that we are going to see a bit of a fight here, which makes quite a bit of sense as the 50 day EMA is so closely followed. If we can break above the highs of the Tuesday candlestick, that for me would open up the possibility of continuing the longer-term uptrend that we had been involved in. Remember, this market got parabolic so a significant pullback like this should not be a huge surprise. People are looking for value, and the market is trying to provide in this latest move.
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