US Dollar Gets Hammered Against Japanese Yen in Safety Bid
The US dollar has fallen rather hard during the trading week, to break through the ¥115 level handily, and then go looking towards the ¥113.50 level at the time of writing. That being said, this is a nasty candlestick and quite frankly it is probably the beginning of something kind of ugly. With that in mind, I will be looking for signs of exhaustion on any rally to start shorting, and if we break down below the ¥112.50 level, I will become much more aggressive. At that point in time, I believe it is probably only a matter of time before we would drop towards the ¥110 level and beyond. Keep in mind that although the US dollar is doing well against most currencies, the Japanese yen is considered to be the “safer” than the greenback, and that is how we are playing this out.
USD/JPY Video 17.01.22
When you look at the size of this candlestick, it is essentially wiping out the previous three weeks, and that is not a good look. It typically means trouble and most of the time you get to candlesticks like this you will get a certain amount of follow-through. With that in mind, I do not have any interest in trying to catch this market to the upside unless of course we get some type of weekly supportive candlestick like a hammer. It would be ideal to see it near the ¥112.50 level, but if it does not hold, look out below as people will be running for the exits.
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This article was originally posted on FX Empire
