The US dollar has been positive after the Kevin Warsh speech on Friday, as we are looking at a Fed that might be a bit more bullish than the markets had been pricing in. The carry trade is also a main driver here.
USD/JPY
The US dollar has rallied during the trading session here on Friday as the Kevin Warsh speech was a little bit more hawkish than people had anticipated. The 160 yen level is an area that has been important multiple times in the past, and we are threatening that as I record this video and write the article. This is a market that remains bullish overall, but patience will still be needed at this point.
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The 50-day EMA sits right there as well, so if we can break above there, then the market could very well go looking to the 161 yen level, possibly even the 162 yen level. Recently, we have seen the Bank of Japan intervene in the currency markets, but the carry trade is still far wide of getting people to jump out of it, and therefore the buyers continue to go to the upside.
Technical Analysis
The 200-day EMA sits right around the 158 yen level, and this is a market that I think continues to see a lot of noise in that area, so I think that could be your floor. It certainly has acted like it so far, and a couple of times. I still feel this is an area that could be a point of inflection.
graph_5755
To the upside, we will eventually probably hear from the Bank of Japan, but this is a long-term position for me, and I have no issues whatsoever holding on to it. And if we can break significantly above 160 yen, I'll probably add to my position. You get paid at the end of every day if you're patient enough to hang on to this position.
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