The US dollar rolled over a bit during the trading session on Tuesday, breaking below the bottom of the trading session on Monday. This of course is a very negative sign, and it should send this market much lower. At this point, the ¥107 level above should continue to be resistance, so I think the market will continue to find sellers near that area. At this point, the ¥105 level underneath would be your target, as it is massive support. All things being equal this is a pair that is wrist sensitive and the risk sensitivity is very high at this point as US/China trade relations continue to fall apart.
USD/JPY Video 21.08.19
Eventually, I believe that the market breaks down below the ¥105 level, and then reached towards the ¥102.50 level. Beyond that, the market is very likely to reach down towards the ¥100 level. Given enough time, the market looks very soft and I think that although the US dollar is favored against most currencies, the Japanese yen will of course be a bit of an outlier as it is an even more worse save currency than most others.
In the meantime, I believe that fading rallies will continue to work on short-term charts, and ultimately the market will continue to favor a lot of volatility with a negative slant. If we did break above the ¥107 level, I think we will struggle at the 50 day EMA just above that level. All things being equal, this is a sell for me.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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