• The US dollar initially fell a bit during the trading session on Thursday but has turned around to show signs of strength yet again.
• Ultimately, this is a market that I think continues to look at the ¥155 level as a major support level, especially now that we have the 50-Day EMA in that general vicinity.
• We ended up forming something akin to a hammer, but at this point it looks like if we can break above the ¥156.50 level, the market is likely to go chasing the 158 you level above.

Bank of Japan and Non-Farm Payrolls

The Bank of Japan defended the ¥158 level quite aggressively, and that’s an area that I think will be a bit difficult to get above. However, if and when we can get above there, the USD/JPY analysis is likely to go looking to the ¥160 level. This is an area that I think being broken could bring in a flood of buying orders, therefore kicking off a bit of “FOMO.” Keep in mind that the Bank of Japan simply cannot do anything too aggressive, because the debt that Japan owes would absolutely crushed the treasury.

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The Friday session of course features the Non-Farm Payroll announcement, which of course is going to cause a lot of volatility as per usual. Keep in mind that a lot of traders around the world are trying to pay close attention to the idea of whether or not the Federal Reserve will be cutting rates, and that of course will have a major influence on how they view the US dollar overall.

The interest rate differential continues to favor the US dollar against the Japanaese Yen pair, so I do think that this is a market that will continue to be very noisy, but ultimately, I do think that you will continue to see a lot of people sit on the interest rate differential in order to build up their account. I have no interest in shorting the market, but if we did break down below the ¥150 level, then I would have to rethink a lot of things in this market.

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