- US dollar finds buyers on dips against the Japanese yen.
- The US dollar plunged early during the trading session on Thursday but has turned around to show signs of life as it looks like the 158 yen level is going to continue to attract some buying pressure.
- In general, this is a market that has been very bullish for a while, and should continue to be, mainly due to the interest rate differential between the two economies with the United States seeing interest rates rise and Japan still being almost nothing.
So, it makes sense as you will see traders hang on and get paid at the end of every day just to simply hold on to this USD/JPY pair. Furthermore, with the jobs number coming out on Friday, that could add more fuel to the fire, mainly due to the idea that perhaps the job market in America is still rather strong and if that's the case then inflation is going nowhere and then by extension the federal reserve isn't going to be cutting anytime soon. With this being said I think you've got a situation where people will continue to see a lot of noisy behavior but even if we were to pull back on Friday it would take something pretty drastic for me to believe that the uptrend is over. I think it would just be a simple hiccup along the way, and you could pick up cheap US dollars in that environment.
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The 158 Yen Level
The 158 yen level has been important, but I think there's also the 156 yen level as a floor and then again, the 155 yen level. Both of these could be areas where buyers come in. If the US dollar breaks out and clears the 159 yen level than 160 yen followed by 162 yen will be targeted. There really isn't much the Bank of Japan can do other than try to bluff the market, which only works so long. So, I remain bullish of this market.
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