The US dollar has rallied during the trading week, testing the ¥107 level. This is an area that has been resistive over the last month or so, but at this point I think that even if we did rally from here it’s likely that the 108 Ken level also causes a lot of problems. With that being the case I think a simple bounce makes quite a bit of sense, especially considering that the ¥105 level has been massive support in the past and of course it is the 100% Fibonacci retracement level from the most recent bounce. Looking at this chart, you can make an argument for a potential range bound situation between the ¥105 level and the ¥115 level, but unfortunately the economic situation has not been conducive to this pair rallying that much.
USD/JPY Video 09.09.19
If we do break down below the ¥105 level, then we will probably go looking towards the 161.8% Fibonacci level, meaning closer to the ¥100 level. This is going to come down to risk appetite around the world, and although we are getting a bit of a reprieve currently, it would make much more sense that more of the same continues and therefore looking for some type of exhaustive move to the upside probably sends this market lower. In the meantime simply being patient is what’s going to make you the most money. While I do like the US dollar overall, the Japanese yen is considered to be an even “safer currency”, so keep in mind that it rises and falls with that overall risk appetite.
This article was originally posted on FX Empire
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