The US dollar rallied significantly during the trading session on Friday against the Japanese yen, which makes quite a bit of sense considering that there has been more of a “risk on” attitude in the stock markets and of course the fact that the US dollar fell everywhere else suggests that although we fell here against the Japanese yen, it was more a matter of taking risk out there as well. The Japanese yen is a safety currency, so unless we are looking to hide from extreme financial distress, this pair should at least make an attempt to bounce.
USD/JPY Video 22.07.19
However, if we break down below the hammer from a couple of weeks ago, we will then go looking towards the ¥105 level, which would be the 100% Fibonacci retracement level. I suspect that we are going to continue to chop around overall, and therefore we continue to try to form some type of base. If we can break above the 50 day EMA which is pictured in red on the chart, that probably would be a bullish and upside to send more money into this market. Beyond that, pay attention to the S&P 500 and the NASDAQ 100, because if they rally, that should give us a bit of pressure to the upside and send this market much higher.
Keep in mind that this pair is rather choppy and disruptive at times, and with the US/China trade headlines crossing the wires, we could get a movement in either direction at any moment in time.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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