The US dollar initially pulled back against the Japanese yen but has found a bit of buying pressure near the ¥108.50 level as it was a previous resistance barrier. At this point, the market is likely to continue to find at least some type of interest, as the market had broken out of a minor consolidation area during the previous session. That being said, the market is still very noisy, and therefore it’s worth paying attention to.
USD/JPY Video 08.04.20
At this point, the market is very likely to take a look at the top of the overall range which is closer to the ¥111 level. The market looks as if there is a significant amount of resistance all the way to the ¥112 level, so I believe that somewhere in that range we should see some exhaustion that the market can take advantage of to go short again. However, if the market was to break above the ¥112 level, then it is likely to continue going much higher, perhaps as high as the ¥115 level. That obviously would be a significant break out and a major “risk on” type of scenario, which at this point I think it might be a bit difficult because the economic damage from the coronavirus will certainly keep a certain amount of risk appetite dampened. Despite the fact that we are getting a nice relief rally with lower numbers, the reality is that we still have plenty of negativity out there but that short-term certainly looks as if the buyers are running the show.
This article was originally posted on FX Empire
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