The US dollar initially tried to rally during the trading session on Wednesday but pulled back to reach towards the psychologically and structurally important ¥108 level. This is an area that has been supportive and resistive in the past, so it should be no surprise at all that we are looking likely to bounce from here. That being said though, you can’t simply expect it, you need to see the market actually doing. Beyond that, we are essentially in the middle of a consolidation area, so I don’t know that the market is going to make any significant move shortly.
USD/JPY Video 25.07.19
To the downside I see the ¥107 level as massive support, just as I see the ¥109 level above as resistance. It appears that we are essentially trading in a summertime range, which makes sense considering that a lot of trading this time a year is simply back and forth. All things being equal I do think that we will make a larger move but it may be a couple of weeks before we get that. Ultimately, with the ¥108 level offering what could be thought of as “fair value”, I think it’s probably best to simply wait to trade at the outer edges of the 200 point range. I think that this market probably continues to be choppy and difficult, but I much more comfortable playing the range back and forth from the ¥109 level and the ¥107 level respectively.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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