- The euro initially pulled back a bit from the 200 day EMA during the trading session on Thursday only to turn around and rally against the Japanese yen.
- The 200 day EMA is currently sitting just below the 162 yen level which is an area that a lot of people will be paying close attention to.
- If we were to break down blow there, then I think you have a very real possibility of a drop to the 160 yen level, which is also backed up by the 50 day EMA as well as the fact that we've seen a lot of noise back and forth in this market.
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To the upside, have the 165 yen level, which offers a bit of a ceiling. But if we were to break above there, then I think you do see the Japanese yen get absolutely hammered, probably against multiple other currencies, not just this one. A breakdown below the 160 yen level means that the yen is starting to strengthen against probably most currencies. And we could drop down to the 155 yen level. This is an area that has been very important for some time and should continue to be.
The size of the candlestick is pretty impressive, but I do recognize that there is a lot of noise above that you will have to deal with. So therefore, I do think that waiting for short-term pullbacks could be a nice buying opportunity and probably the way to go with this market. I have no interest in shorting it, at least not until we break down below the 160 yen level, which is something that would be somewhat difficult to do in this short-term environment. This is a market that will continue to be very choppy to say the least.
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