In the course of the trading week, the US dollar has sharply declined to test the 147.80 level, or the area where the market had previously encountered resistance. By retracing our steps, we have demonstrated life by turning around. Since we are ultimately testing the peak of the market as a whole, we must inquire into several aspects of the present situation. There may be some slight resistance around the 150 level, and if we can break above it, it opens the door to a move up to the 152 level.
The market may eventually look to the 146 level, possibly even lower than that, if we do break down below the candlestick’s bottom, but I don’t see that occurring easily. Since the Bank of Japan is now pursuing a very loose monetary policy, it is anticipated that the Japanese yen will experience significant negative sentiment, which is fully shown on the chart.
The candlestick has a hammer-like shape, so the question is whether it will actually continue to move upward as a hammer or whether it will eventually turn into a “hanging man” where the market breaks down below the candlestick’s bottom and generates significant selling pressure. We’ll have to wait and see, but given that interest rates are virtually at their absolute maximum, there is currently no indication in the bond market that the Federal Reserve will abruptly relax monetary policy.