- The US dollar finds buyers on the decline against the Japanese yen.
- The US dollar fell early in Thursday’s trading session but turned around to show signs of life as the 158 yen level looks set to continue to attract buying pressure.
- Overall, this is a market that has been very bullish for a while, and should continue to be, largely due to the interest rate differential between the two economies, with the United States seeing rising interest rates and Japan still seeing next to nothing.
So it makes sense because you will see traders holding on and getting paid at the end of each day just to simply hold this USD/JPY pair. Furthermore, with the jobs numbers coming out on Friday, that could add more fuel to the fire, mainly because of the idea that maybe the US labor market is still pretty strong and if that’s the case, then inflation isn’t going anywhere, and then some. the federal reserves aren’t going to taper any time soon. With that said, I think you have a situation where people will continue to see a lot of bullish behavior, but even if we pull back on Friday, it would take something pretty drastic for me to believe the uptrend is over. I think it would just be normal hiccups along the way, and you could pick up cheap US dollars in that environment.
The 158 yen level
The 158 yen level was important, but I think there is also the 156 yen level as a bottom and then the 155 yen level again. Both could be areas where customers come. If the US dollar breaks through the 159 yen level, the target will be 160 yen followed by 162 yen. There really isn’t much the Bank of Japan can do other than try to bluff the market, which only works for so long. So, I remain bullish on this market.
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