This is a market that I think is worth taking on a day-by-day decision.
The yen is a popular asset during turbulent times.
Granted, interest rates in the United States have been falling, but they’re still significantly above where we see them in Japan. I’m waiting to see stabilization in those rates, and then you will more likely than not see a turnaround in this pair. Ultimately, the market is likely to see a lot of volatility, and it is worth noting that just below the current area we have a ?132 level offering significant support. The 50-day EMA is just above, offering a bit of short-term technical resistance.
The pair has been in a massive uptrend for ages now, and it’s possible that I will have to wait a bit in order to find enough stability to get long again. I have no interest in shorting this market, at least not quite yet. We would have to see a major change in the interest-rate situation to think that this trend is over. Granted, this has been a significant breakdown, so that possibility is on my radar.
I think it’s more likely than not that we will bounce heading into next week. The market will continue to see the ?140 level as a potential target, but it’s going to take some effort to get there. On the other hand, if we were to break down below the ?128 level, I think it would hint to a major trend change. In that scenario, we would probably see the US dollar fall everywhere, which is something that we do not see quite yet. In other words, you have to pay attention to plenty of other markets in order to make the play here. Ultimately, this is a market that I think is worth taking on a day-by-day decision. The daily chart and how we close every day will be my guide.
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