The US dollar has rallied significantly against the Japanese yen during the trading week again, and it looks like gravity no longer applies. That being said, the market is one of those situations where we will eventually get some type of significant pullback, which could be quite scary. At this point, the market could offer value, but you need to wait to find signs of stability in order to get involved. That being said, the market is overstretched, so it desperately needs to see some type of value proposition jump back in.
USD/JPY Video 21.03.22
The Japanese yen is considered to be a safe currency, so it is interesting that it has sold off so drastically around the world. I think what we are seeing more than anything else at this point in time is going to be a reach for yield. Japan simply does not offer yield at the moment, so it is difficult to get overly excited about its currency.
When I look at this chart, I believe that the ¥116 level would be an area where I think there will probably be plenty of buyers in that general vicinity. The market desperately needs to find some type of value in order to be tradable, because right now you simply cannot short this market, and you certainly cannot chase it. Because of this, I am on the sidelines and waiting to see a bit more clarity in order to get involved in what is a runaway market at this point. With this, simply waiting for a pullback is the only thing I can do.
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This article was originally posted on FX Empire
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