US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back just a bit against the Japanese yen to kick off the trading session on Tuesday, but it looks as if the 200 day EMA is going to continue to offer a certain amount of support. That being said, I think the one thing you can count on in this market is that it’s going to be choppy regardless, and therefore you can’t get overly exposed, at least not until we get some type of follow through on a move. As things stand right now, it just doesn’t look like we have the momentum necessary to make that happen.
By doing so, I think we’re going to continue to see this market bounce around between that 200 day EMA and the 50 day EMA above. The 145 yen level is right in the middle of that, so it becomes a bit of a focal point for the currency pair. Keep in mind that interest rates have a major influence on where we go, so you most certainly are going to have to pay close attention to the 10-year yield in the United States and therefore I think you need to be one eye on this chart and another eye on the 10-year yield paying close attention to the correlation. The Bank of Japan is nowhere near trying to tighten monetary policy and even though the Federal Reserve is suggesting that it could cut a couple of times in 2024 it still is going to have a major positive interest rate differential in this pair.
So, you get paid to hold on to it, you just don’t get paid as much at the end of every day is probably the story there. Breaking above the top of the shooting star from the Friday session could open up a move to the 147.33 level. Underneath we have the 142 level which offers significant support, and then again at the 140 level we see support. Breaking down below that level could open up the floodgates to the downside, but we are still, despite the last month or so, technically in a longer term uptrend.
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