The US dollar rallied significantly during the trading session on Tuesday, breaking above the top of the shooting star for the Monday session. By doing so, we cleared the ¥108 level as well, which of course is a round figure that should attract a lot of attention. However, we are currently in the middle of a consolidation area, which extends to the ¥108.75 level. Ultimately, we also have the 50 day EMA slicing through that level so I do think that there is a significant amount of resistance above that will keep this market in this range.
USD/JPY Video 24.07.19
That being said, if we can break above that area, it’s very likely that the market will then go looking towards the ¥109.65 level or so, which would take out the “wipeout candle” from several weeks back. A move above there would take out the 200 day EMA, and then start a March much higher.
To the downside I see a lot of support near the ¥107 level, and I think that it is the “floor” of the overall market, so if we were to break down below there it’s very likely that the market would try to wipe out the entire move to the upside, meaning that we would break down towards the 100% Fibonacci retracement level. That could send this market down to the ¥105 level, which should also be massive support, but offer a nice trading opportunity for several sessions or perhaps even several weeks. All things being equal though, I think we are stuck in a range as it is summertime and it seems relatively well-defined.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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