The US dollar fell rather hard against the Japanese yen during the trading session on Friday to close out the week, as we continue to see US dollar softness. That being the case, it is likely that we are going to try to reach towards the ¥106 level. That is an area that has formed a bit of a double bottom but if we break down below there it is likely we go looking towards the ¥105 level. Ultimately, this is a market that has been very attracted to the ¥107.50 level, as it has been like a magnet for price. Think of it like a Bollinger Band indicator, that is almost “normal.” However, it does look like we are going to attempt the ¥106 level again, and if it does break down it is almost assured that we are going to go looking towards the ¥105 level rather quickly.
USD/JPY Video 13.07.20
Ultimately, the ¥105 level should be rather important, because of that gives way to the selling pressure, then we could be looking at a move down to the ¥102 level. Rallies at this point cannot be trusted, because quite frankly there is no point in trying to fight what has been the case for some time, US dollar weakness based upon the Federal Reserve. As long as the Federal Reserve continues to liquefy the markets, it is likely that we are going to continue dropping. If we continue dropping, it then will probably bring the Bank of Japan into the picture, but probably closer to the ¥100 level.
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This article was originally posted on FX Empire
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