The US dollar continues to see a lot of selling on Tuesday in the overall Forex markets, but in the USD/JPY pair, its had an entirely different foe over the last couple of sessions.
USD/JPY
The US dollar continues to see a lot of selling on Tuesday as it initially tried to overcome the 155-yen barrier but then rolled over. This has nothing to do with the Japanese yen, or at least not directly. This is more along the lines of central bank intervention.
There was concern that the yen was going to get out of control and the Federal Reserve, and the Bank of Japan seem to have coordinated some type of action. That being said, the US dollar is already weak, so that just added more fuel to the fire.
Central Bank Intervention and Technical Support
I see this as a very interesting area to trade from because if the 200-day EMA, presently at the 152 yen level, holds as support, this could be an amazing entry. This is a little bit different than other pairs where the US dollar is involved because the Japanese yen is that weak.
After all, this was not natural market forces, so I do look at it through the prism of skepticism. If I am going to buy the US dollar, the Japanese yen would be a great place to start. If the US dollar continues to fall drastically, there are plenty of other currencies to trade it against at the moment, as even the Euro, which really does not move much most of the time, is actually making a move.
I am watching the 200-day EMA just below for signs of whether or not this correction continues or do we bounce. Because if we bounce, that might end up being an entry.
Want to trade our USD/JPY forex analysis and predictions? Here's a list of forex brokers in Japan to check out.