USD vs. JPY Technical Analysis
During Thursday’s trading session, the US Dollar initially fell, approaching the 155 yen level, but then reversed and showed strength. This makes it look like the market may recover from the massive sell-off we’ve seen so far, and frankly, I think it’s probably just a matter of time. Those who are a bit more aggressive have probably already re-entered the pair, and I believe the 155 yen level is an area where many will need to pay close attention, both in the past and in the future.
So, given the market memory tied to this level, it’s not too surprising that we’re about to form some kind of hammer. I think what matters at this point is how we do on Friday. Will we have some follow-through? Frankly, I expect it, but it’s a little hard to predict. I think during Wednesday’s session, the Bank of Japan may have also been involved, because they are notorious for waiting for a lot of negative movement in the market before jumping in to really push the issue.
Still, this is a market that makes profits at the end of each day and I think traders will continue to pay close attention to that. The 10-year Treasury yield will be a big factor in what’s going to happen going forward so keep an eye on it. If yields start to rise again, that will almost certainly put upward pressure on this market.
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This article originally appeared on FX Empire