- The US dollar has fallen a bit against the Japanese yen during the trading session on Friday, as we continue to see a lot of noisy behavior in the currency markets.
- The US dollar is going to continue to move on the latest idea of whether or not the US economy is heading into recession, and it’s also worth noting that the Japanese yen is considered to be a safety currency.
- Because of this, I think you have a situation where market participants will continue to look at this through the prism of whether or not there is any momentum.
Recently, we had seen a nice bounce in the US dollar, perhaps due to the fact that the Bank of Japan is very unlikely to be able to heighten monetary policy too much further, so therefore I think the appeal of the Japanese yen is starting to wane just a bit. That being said, the market is likely to continue to see a lot of noise here, because we just don’t have any clarity in the markets overall. After all, the concerns about tariff wars will continue to cause a lot of back and forth when it comes to risk appetite, which of course gets transferred into this market.
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Technical Analysis
The technical analysis for this USD/JPY market is still negative, because we are starting to fail at the crucial 50 Day EMA. The 200 Day EMA sits just above there, so there are plenty of people out there watching these indicators to determine whether or not the market can break to the upside. If we cannot, then we could see a resumption of the Japanese yen strengthen, but if we were to clear the ¥152 level, extensively clearing the 200 Day EMA, then the US dollar is likely to go looking to the ¥155 level.
On a break down below the ¥148 level, that could open up the trap door to the downside in this market, but I think in the short term we are just simply going to go back and forth in this same general pattern, and therefore I think you have to be somewhat patient and perhaps focusing on shorter term charts.
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