- The US dollar rallied rather significantly during the trading session on Wednesday.
- As we have now broken to a fresh new high, we are above the 160 yen level, an area that the Bank of Japan had intervened in previously.
- I think it does make a certain amount of sense that people are taking a look around and piling in.
Yen is Getting Crushed Everywhere
It's not a huge surprise considering many of the other yen-denominated pairs have already broken above the Bank of Japan intervention level, so it was probably only a matter of time before the dollar did it as well. The obvious analysis of this USD/JPY pair is that when you pull back, you find value and you buy.
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You get paid at the end of every day to hang on to this position, so that makes a lot of sense that we would have traders coming in and trying to take advantage of any cheap US dollar that they can. The 158 yen level underneath should continue to be support right as the 50 day EMA is starting to race towards it. We also have the 155 yen level underneath there offering support as well. Based on the measured move of the breakout that we just did; we could be looking at a move to as high as 168 yen.
That doesn't mean we get there anytime soon, and it doesn't even necessarily mean that we even get there this year. I think this is going to continue to be more of a grind higher, although breaking through all the stops at the 160 yen level, of course, is something that a lot of people will pay attention to. But at the end of the day, it really doesn't change anything because we've seen the same behavior for months now.
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