The US dollar has rallied significantly during the trading session on Tuesday but is also testing the crucial 200 day EMA. That is an area that of course will attract a lot of attention, and quite frankly more than likely will jump into the path of buyers. There is a large amount of resistance between there and the ¥109.50 level, which is coincidently the 61.8% Fibonacci retracement level. In other words, the market has a lot of noise in this area that will continue to cause issues, so it should not be a major surprise that we would struggle in this overall vicinity.
USD/JPY Video 06.11.19
Looking at the chart, it’s very likely that the USD/JPY pair will bounce around between the 50 day EMA on the bottom which is painted in red on the chart, and the 200 day EMA which is black. At this point, the market certainly looks more bullish in the short term, but it’s not until we break out of this range that a significant can be had. Keep in mind that the market is very likely to move right along with the S&P 500, as the correlation between the two markets is relatively high. Remember, the Japanese yen is considered to be a safety currency, and therefore that safety currency will be a great barometer as to whether or not the market is feeling positive or negative in general. All things being equal, the market looks as if it is trying to build up enough momentum to try to break above that resistant barrier, but it’s going to take a Herculean effort to do so. Because of this, a certain amount of patience will be needed.
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This article was originally posted on FX Empire
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