As long as it’s going to be the case, then it’s very likely that what we have is a situation where the market will be correcting itself sooner rather than later.
As long as it’s going to be the case, then it’s very likely that what we have is a situation where the market will be correcting itself sooner rather than later. The fact that we pull back to the ?142 level is not a huge surprise, considering the historical importance of this area. If we do break down below there, then the ?140 level gets targeted as well. The size of the candlestick is rather impressive, but at the end of the day we are still in a huge uptrend.
I’m looking for signs of stabilization and then buying pressure that I can get involved in. Granted, this is a pair that probably needed to pull back because it had been so one-way for so long, but the Bank of Japan continues to flood the market with the Japanese yen as they are trying to keep interest rates down. Meanwhile, even if the Federal Reserve is going to slow down its rate of tightening, it is still going to be light years ahead of the Bank of Japan.
The ?135 level underneath is essentially where the 200-Day EMA is currently sitting, and therefore I think that is the bottom of the overall trend. It looks at this point as if we are trying to test some type of trendline, but ultimately, I think the most important thing to pay attention to is going to be the bond market. As long as the bond market continues to see high-interest rates in America and the Japanese sitting right at 0.25% on the 10-year, it’s only a matter of time before this market turns around and goes to the upside. Ultimately, this is a market that desperately needed this pullback, and we will have to wait and see whether or not people are willing to be short the greenback heading into the weekend.
We will connect you with the broker that is most compatible for you.