Continues to See Support Underneath

If the market breaks down below the bottom of the candlestick for the Wednesday session, it could go down to the ¥132.50 level, an area where there has been a lot of support previously. 

• The USD/JPY initially fell during the trading session on Wednesday, but it found plenty of support, forming a hammer that indicates a bullish sign.
• Despite moving rather slowly, the market is likely to continue seeing buyers on dips and upward momentum in the US dollar.
• This makes sense considering the many questions around the world regarding where the market is heading next.

If the market breaks down below the bottom of the candlestick for the Wednesday session, it could go down to the ¥132.50 level, an area where there has been a lot of support previously. After that, the market could look to the ¥130 level, which is a large, round, psychologically significant figure that could attract a lot of attention. Alternatively, if the market breaks out to the upside, it could go looking for the ¥135 level, which is also a large, round, psychologically significant figure that could result in a lot of noise.

The market is expected to remain very choppy, which makes sense considering that a lot of it is based on the bond market, which has been very noisy. The Bank of Japan continues its yield curve control policy, which keeps the 10-year JGB to 50 basis points or less. If that’s the case, the Japanese yen could get printed in mass amounts, which could flood the market with the Japanese yen, dropping the currency’s value.

The US dollar also must look at this through the prism of strengthening due to interest rates, which remain high in the United States. If that’s the case, it should continue to push the market higher. If the market breaks above the ¥135 level, there could be even more momentum to the upside.

In conclusion, the US dollar initially fell during the trading session on Wednesday but found plenty of support, forming a hammer that indicates a bullish sign. The market is expected to remain very choppy, and the Bank of Japan’s yield curve control policy could drop the value of the Japanese yen. However, the US dollar could continue to push higher due to high-interest rates in the United States. Ultimately, the market could break above the ¥135 level, resulting in even more momentum to the upside. Investors should pay close attention to the support and resistance levels to determine the market’s direction.

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