US Dollar Breaks Resistance Again

·2 min read

The US dollar has rallied significantly during the course of the trading session on Thursday to break above the ¥115 level. This is an area that of course is a large, round, psychologically significant figure, and therefore will attract a certain amount of attention. That being said, I think that short-term pullbacks will continue to get bought into, as the US dollar is almost certainly going to be the main asset that people will want to own when the financial markets seem to be breaking down.

USD/JPY Video 28.01.22

That being said, keep in mind that the Federal Reserve is on course to continue tightening, and therefore it is likely that we will see the US dollar continue to strengthen against almost everything as recession seems imminent. I do believe at this point in time that any pullback you see will be thought of as a potential buying opportunity. The 50 day EMA underneath offers a certain amount of support, but then you also have the ¥101.50 level, assuming that we can even break down to that region.

That does not look very likely, so at this point in time I think what we have is a situation where value hunters continue to come back into what has been a very strong uptrend for quite some time. All things been equal, this is a market that should go much higher, and I do believe at this point in time that the interest rate differential between the two countries will continue to be a major propellant as to where we go over the longer term. Rates in America are spiking, and that is probably the most important thing to pay attention to.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire


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