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MENAFN- Daily Forex)
The US dollar initially pulled back just a bit during the trading session on Wednesday, but it looks like we continue to find plenty of value hunting. This is a market that pays you at the end of the day to hang on to it. The fact that the swap on Wednesday is typically a triple swap with most brokers, it makes sense that Wednesday would be a positive session.
It's been positive for ages and should continue to be
Whether or not it hangs on to this positivity remains to be seen, but clearly, this is a market that I think will continue to favor the upside regardless. I like the idea of buying dips when they happen, but they just don't happen that much. Underneath, we have the 155 yen level as an area of potential support, as it is a large round psychologically significant figure, and it is also attracting the 50 day EMA .
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On the upside we have the 158 yen level offering resistance due to the Bank of Japan intervention several weeks ago. We have seen other currencies break out to fresh new highs against the Japanese yen, so I don't see why this USD/JPY one won't eventually. With this I do believe that we are trying to get to the 160 yen level which of course is the next major level. If we can break above that, then it kicks off the next leg higher in the overall uptrend. After all, the interest rate differential between these two currencies isn't going to change anytime soon.
Make sure to position size accordingly, because that of course can cause a significant amount of trouble if you get overexposed. Furthermore, keep in mind that some other currencies are behaving much stronger against the Japanese yen than the US dollar, so although this is a great measuring stick for the weakness of the Japanese yen, the reality is that although we go higher, you may get more momentum in other pairs such as the GBP/JPY pair or even the NZD/JPY pair.
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