The US dollar has rallied quite nicely against the Japanese yen during the trading session on Thursday, as more of a “risk on” move has come back into play. After the tensions in the Middle East settled down, traders began to look for a way to benefit from the bullish markets overall. Ultimately though, there is a lot of resistance at the ¥109.60 level, so if we could break above there and then perhaps even reach towards the ¥110 level, then we could have something rather interesting to get involved in. At that point, the market very likely would go looking towards the ¥111 level, and then eventually the ¥112.50 level. On the other hand, we could always pull back.
USD/JPY Video 10.01.20
At this point, if the market was the pullback from here it’s likely that the ¥108 level will offer a significant amount of support, and with the jobs number coming out for Friday, it’s likely that the market will have a lot of volatility. Unless of course it is some type of major shock to the system, any pullback should find plenty of buyers. Whether or not we can break out above the resistance is a completely different conversation, but it certainly shows that the market is trying to build up the necessary momentum. All things being equal, I am much more comfortable buying dips that I am trying to get involved in the breakout, but if were to get a daily close above the ¥110 level, then I would be willing to start buying. At this point, I think you have to assume that the short-term range holds.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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