• As I analyze the U.S. dollar’s decline against the Japanese yen, I emphasize key support near ¥153 and ¥150.
• Despite recent weakness, I expect buyers to return, favoring the dollar as the broader uptrend remains intact due to rate differentials.

The U.S. dollar fell pretty significantly during the trading session on Thursday against the Japanese yen, but we find ourselves hanging around the crucial ¥153 level. The ¥153 level is an area that a lot of people have been paying close attention to multiple times in the past, and therefore, I think if we get some type of breakdown from here, there’s plenty of support all the way down to the ¥151.50 level, possibly even the 50-day EMA, which is at the ¥150.66 level.
 

(Click on image to enlarge)

The ¥150 level is a major support area after that. It really isn’t until we break down below the ¥150 level that I think we see a potential shift in the trend, and right now I think that’s a bit much to ask. I like the idea of buying the bounce if and when we get it, and therefore, I expect a certain amount of volume to come back into the market and push it higher. For now, my job is simply to wait and get involved once the market shows signs of life.
 

The Importance of 155 Yen

The ¥155 level is another area that many traders will be paying close attention to, as it has been important in the past. If we break above the ¥155 level, this market could continue to move much higher.
 

The interest rate differential will continue to favor the Americans, and the Bank of Japan really won’t have much opportunity to tighten monetary policy or close that differential between the two currencies. I think it’s probably only a matter of time before the overall uptrend continues. I plan on getting involved again once it does, adding to an already long position that I’ve held for months.

More By This Author: