The US dollar dipped initially during the trading session on Monday but bounced back as we have seen several sessions in a row now.
USD/JPY
The US dollar dipped initially during the trading session on Monday again against the Japanese yen, but as we have seen about 5 days in a row now, once it starts falling, carry traders jump back in and pick it up. So really not much has changed here, but what I am paying attention to is resiliency. The resiliency itself is something worth paying attention to, as, despite the fact that the headlines tell you to be afraid of the Bank of Japan, clearly somebody out there isn't.
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The 158 yen level underneath offers support right along with the 200-day EMA. So we'll see how that plays out. There's also a trend line there that the market did successfully defend. I think the 160 yen level above is an area that might be watched kind of closely.
Carry Trade Resiliency and Moving Averages
In the meantime, I'm just hanging on to my position and getting paid at the end of every trading session. That's really all there is to this. The carry trade, of course, is working in your favor, and rates in America still being relatively elevated makes it a nice turn of events.
The 160 yen level being broken to the upside could have the market challenging the 50-day EMA. We'll just have to see. The 50-day EMA, of course, is a technical indicator a lot of people watch, but we have bounced essentially from the 200-day EMA, defining an uptrend. Whether or not we actually get any traction from here remains to be seen, but I do find it interesting that the market won't fall. That in and of itself could be a bit of an opportunity if you pay attention.
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