The U.S. dollar plunged against the Japanese yen during the course of the week as we saw a massive risk off type of move, but it certainly looks as if the 152 yen level has come into the picture to offer a bit of support. Thursday was particularly interesting as we looked like we were really going to fall apart and then just turned around and bounced quite drastically. At this point, if we can recapture the 155 yen level, I think a lot of traders will come in and continue to push this pair to the upside, perhaps trying to reach the 160 yen level. This is an area that will of course attract a lot of attention from traders.
If you look at the weekly chart, it’s easy to see that we just retested the top of an ascending triangle and the fact that we found support should not be a huge surprise. With that being said, this is a market that I think continues to see a lot of volatility, but it still favors the upside in general. This is a market that’s been in an uptrend for the last four years or so and despite the fact that it has been so viciously sold off the last three weeks does not change that. And in fact, I do believe that we are in a state of flux right now, trying to recapture that overall upward momentum.
