When it comes to the Japanese yen, the US dollar is now walking carefully. The weekly candlestick from the prior week is what I am most interested in when I look at this chart, coupled with the trendline that has been so significant for a long time. Technically speaking, we are still in an uptrend, but if we close below the previous week’s candlestick bottom, there may be significant downward pressure, possibly all the way to the ¥130 mark.
However, if we were to reverse course and break above the peak of the candlestick for the previous week, it would indicate tremendous upward pressure that is just ready to explode. I believe that both central banks will maintain their current monetary policy of extreme leniency, which naturally means that there is a battle between two possible lightweights.
Having said that, you need bear in mind that the candlestick does not appear to be extremely bullish. In the end, this pair seems poised for a significant move of some kind, but there will be little liquidity throughout the coming week, which may make trading challenging. Watch this closely because during the next week or two, we could get a glimpse of how things will unfold in 2024. In the end, it appears that most individuals are willing to trade in response to the possibility of a rate easing by the Federal Reserve.