- The US dollar rallied again during trading on Wednesday as the Japanese yen finally gave way to the ¥158 level and pressures on it.
- Because of this, the market will likely continue to see a lot of upward momentum, but also keep in mind that Friday is the non-farm payrolls release, which obviously has a big impact on how the bond market reacts to this.
At the end of the day, interest rates in the US are one of the biggest things driving this market, as we’ve seen a huge amount of money fly into the US dollar as US rates continue to rise quite drastically. Along with this, it is worth noting that market participants continue to look at America as one of the few places to invest money, as the US dollar appears to be an unstoppable force. Furthermore, it’s probably worth noting that we’re in a big uptrend anyway.
Technical Analysis
The most obvious part of the technical analysis worth paying attention to is the fact that the ¥158 level has finally been broken, which was an area of major resistance earlier. A break above that comment is a springboard for the pair to higher levels from what I can see, but with the Non-Farm Payrolls announcement coming out on Friday, it’s likely we’ll continue to see some volatility. If those jobs numbers come in higher than expected, we could see the US dollar really take off from here.
Even if we break below the ¥158 level, it is very likely that we could see the ¥157 level offer significant support. It’s a market that’s been very noisy lately, but it’s certainly on the upswing, and I think that’s still the way you have to look at it, more of an uptrend than anything else. In fact, I have no interest in shorting this pair, at least not until we break below the ¥154 level, something that won’t happen anytime soon.
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