The US dollar has pulled back a bit to kick off the week, but then shot straight up in the air as the demand for the US dollar continue to pick up. Even though the risk appetite has been decidedly negative, the Japanese yen has suffered at the hands of the greenback, which is by far the most favored currency in the world right now. Having said all of that, the ¥112 level looks to be very resistive, so I think it’s only a matter of time before we rollover.
USD/JPY Video 23.03.20
Looking at the size of the candle, it shows just how volatile the markets are, and have been for the last couple of weeks. I think we are trying to carve out some type of range year, and for what it’s worth the US Dollar Index is getting extraordinarily overextended, which should weigh upon this market as well. While I don’t necessarily like shorting the US dollar, I do think that the Japanese yen is far oversold. It’s very likely that we go looking towards the ¥108 level on signs of weakness, possibly even as low as the ¥105 level.
Keep an eye on the yen related currency crosses out there, and I think that paying attention to this chart may lead to opportunities in pairs such as AUD/JPY, EUR/JPY, and the like. Remember, this is one easy way to measure the overall strength of the Japanese yen in can be extrapolated to other markets.
This article was originally posted on FX Empire
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