US dollar breaks down against the Japanese yen
The US dollar has bounced a bit during the trading session initially on Thursday but then rolled over as people are concerned about tariffs being applied to the EU, Canada, and Mexico. This suggests that we are going to continue to see a lot of fears in the stock markets out there, and I think that it will present itself in buying of the Japanese yen as it is considered to be a safety currency. Now that we have failed at the ¥109 level, I think we will more than likely go looking towards the lows again, and perhaps will go testing the 107.50 young level underneath which is massive resistance that should now be supported.
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When you look at this chart, you can see that we have made a “lower high” on the hourly chart, and now it made a “lower low” as I record this. It’s likely that the market will continue to see a bearish pressure due to this, and I think that rallies will be sold in the meantime. I think that the ¥110 level above is significant resistance, so if we were to turn around and break above that level, obviously would be a very bullish sign. I think we need to retest the ¥107.50 level, but I think at that point we will probably find plenty of buyers to jump into this market. Expect volatility, but I think that the risk is significant for geopolitical disruptions, so I do prefer the downside in the short term. Longer-term, I think the buyers will come back.