The US dollar continues to go a bit sideways against the Japanese yen with a slightly downward twist. That being said, I do think that this market probably breaks down from here and goes looking towards lower levels, but we may have the occasional short-term bounce along the way. It is because of this that I believe this market is more or less a short-term trading environment that you look for selling opportunities based upon exhaustion.
USD/JPY Video 07.08.20
Non-Farm Payroll tends to have a massive it influence on this pair, so it is probably going to be pretty quiet until 8:30 AM New York time. At that point, you may see some volatility pick up but ultimately this is a market that looks very soft and therefore I think that even if we get a little bit bigger of a rally, it is likely to be sold into, especially near the 50 day EMA.
Above there we have the ¥107.50 level that is massive resistance, so I think it is only a matter of time before all of that comes into play. To the downside, I could see a move to the ¥104 level happening on some type of bad news, or just simple US dollar pressure which we have seen quite a bit of recently. That being said, we have seen a little bit of a relief rally in the greenback and that is causing some people to take profit in their dollar shorts. The trend has most decidedly shifted to more of a negative bias on the greenback though, and that is not something you should be fighting.
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This article was originally posted on FX Empire
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