The ¥105 level was tested early during the trading session on Monday, as we finally fulfilled that move that I had been talking about. The question now is whether or not we stay above there or if we break down going forward. It’ll be interesting to see how this plays out, but I suspect that if we break the ¥104.80 level, then we should go much lower. At that point, I suspect that we would be looking at the ¥102.50 level, and then the ¥100 level. I suspect that somewhere closer to the ¥100 level we will be hearing more from the Bank of Japan, as they will not like that move and are one of the few central banks that seem to jump into the currency markets rather quickly.
USD/JPY Video 13.08.19
A bounce from here suggests that we could go as high to the ¥107 level above, which was previous support and should now be resistance. I suspect that any move toward that general vicinity shows signs of exhaustion, and that’s a move that I’m willing to fade. The 50 day EMA is starting to run towards the ¥107 level underneath, so I think it’s only a matter of time before we take advantage of the technical signal as well. Keep in mind that this pair is highly sensitive to risk appetite and it seems that the risk appetite out there is starting to fade. Ultimately, this is a market that continues to favor the downside but might be slightly overextended.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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