The US dollar has shown itself to be somewhat resilient, as we had initially broken down towards the ¥106 level but found that area to be supportive yet again. That is an area that has been supportive more than once, and is the bottom of the overall range that we have been in. With that in mind, I like the idea of buying the US dollar against the Japanese yen, at least in the short term. I do not necessarily think that we are going to blast off to the stratosphere, but a move back to the ¥107.50 level makes quite a bit of sense considering what we have seen over the last several months.
USD/JPY Video 25.06.20
Speaking of the ¥107.50 level, it is essentially a magnet for price. You can see where we have gone back and forth on that level multiple times over the last few months, and therefore it is not worth trying to overthink this situation. We will be looking for an opportunity to reach back towards that area, an area that most market participants seem to be relatively happy with pricing. If that is going to continue to be the case, then it is likely that we see a push towards that area. However, if we were to break down below the ¥106 level, that could signify something a little bit more nefarious going on. On the other hand, if we can break above the ¥108 level the market might go looking towards the 200 day EMA followed by the ¥110 level.
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This article was originally posted on FX Empire
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