The US dollar has rallied significantly during the course of the week to reach towards the ¥115 level, an area that has been important multiple times over the last several years. The fact that we pulled back to form a bit of a shooting star is kind of interesting, because it initially looked like we were breaking out above a massive bullish flag. That does not mean that we still will not, but clearly ¥115 is an area that has to be leapt over in order to get long.

USD/JPY Video 22.11.21

If we break down below the bottom of the candlestick for the week, it is very likely we go looking towards ¥112.50 level, and it should be noted that the market breaking down below there could go looking towards the ¥110 level. That is an area that has been important multiple times in the past and you can see there is a huge amount of noise in that area, so it would make a reasonable target. All things been equal, this is a market that continues to be very noisy, but I do not necessarily get long at this point until we get above the ¥115 level. Until then, the market needs to prove itself. If we do break out above there, we will probably see even more in the way of bullish momentum, especially in other Japanese yen related currency pairs around the world. As things stand right now, I am very neutral this pair, because quite honestly, I missed the huge run higher.

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This article was originally posted on FX Empire


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