The USD/JPY tests 115.00 and EUR/USD is back above 1.4200

The Dow Jones, the dollar, yen, and euro have all been making news and making moves.

The correlation that many traders have been watching between the Dow Jones and USD/JPY has been moving nicely as the Dow founds support at 13,407.49 and is rallying up through 13,500 and 13.600 resistance. The Dow Jones Industrial Average is currently trading up 72.43. This brings into the play the correlation between U.S. equities and the USD/JPY.

The dollar-yen on the daily chart shows a test of support along the uptrend line of the past three dips around the 112.50 level.

This 112.50 area is support for two main reasons. The 112.50 is major psychological level and the breakdown of the prior channel down patterns had a target (support) between 112.37. This area of just 12 pips will be one to keep an eye on as the dollar-yen, mainly pressure by the morning sell off of the U.S. Dollar, is trading slightly lower at 114.60. The dollar-yen has tried to rally but the 115.00 is resistance as the morning's high is 115.04. The dollar-yen chart also shows that the rising wedge pattern has broken down through the uptrend support.

Keep in mind that the U.S. Dollar is coming off it's single biggest move higher since 2005 and that any rally has been met with swift selling and resistance at each "00". Before buying into any thought that the dollar rally is the beginning of a new bull market in the dollar, I am reminded of something Warren Buffett said when asked which currency he felt was the best to own. His reply? (scroll down to the bottom to see that...)

The rally in the EUR/USD shows the morning's weakness in the U.S. Dollar as prices are once again poised to test 1.4300 as the U.S. Dollar Index trades down to 77.50.

"Not the dollar." - Warren Buffett's reply when asked which currency is the best to own now.

Raghee Horner is a private forex, futures, and stock trader based in South Florida. She is the author of two best-selling forex trading books and a sought after speaker. All charts we used with permission from Autochartist.