- The British pound has dipped against the Japanese yen during trading, as there was a little bit of a risk-off vibe to the day, but we have turned around to show signs of life again.
- It looks like the market is going to continue to favor the Japanese yen against multiple currencies, whether or not that's the case against the British pound is a completely different story.
- The 190 yen level is an area that I think a lot of people will be paying close attention to.
If we can break above there, then the market could go looking at the 50 day EMA near the 192 yen level. I do think that happens given enough time. If we see the overall risk appetite pick up a bit, and more importantly, the yen overall lose strength.
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On a Move Lower
If we break down from here, the 188 yen level is support, and I think that it extends down to the 185 yen level, which is a massive bottom in this pair. On the chart, the market has 500-point increments, and you can see that it has paid close attention to these levels, and as we are close to one, it's not a huge surprise to see that we've gone back and forth.
The question now is, which way do we break? Ultimately, I think we go higher, but I also recognize that a lot of people are still excited by the Japanese fighting inflation, but they'd be hard pressed to get to 1% interest rates, and right now they're only projected to go to 0.75%. So, while that's better than it once was. It doesn't compete against the United Kingdom or multiple other currencies around the world. So long term, I'm still bullish, but I recognize it is going to be a noisy affair indeed.
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