The US dollar has rallied against the Japanese yen during trading on Friday to in the week, as there is a little bit more optimism than the day before when it comes to the US/China trade deal. Quite frankly though, this is getting to be less and less impressive, and at this point it’s likely that the market will probably have to have some type of catalyst to either break higher or break down. At this point, the 200 day EMA is starting to offer resistance, just as the 50 day EMA is starting to support. Beyond that, the 50 day EMA is starting to reach towards the 200 day EMA threatening to form a “golden cross” which of course is a bullish sign.
USD/JPY Video 18.11.19
Above all of this we have the 61.8% Fibonacci retracement level offer and resistance, and at this point the ¥109.50 level is the beginning of resistance to the ¥110 level. If we were to finally break above there then the market would be free to go much higher, perhaps to the 100% Fibonacci retracement level closer to the ¥112.50 level. All things being equal I think that this market does break out to the upside, but we need to find a catalyst to make this market go higher. Remember that is very risk sensitive, and therefore if we can get good news on the US/China Frank, stock markets breaking out to make bigger moves, or anything along those lines this pair will go higher. In the meantime, expect it to go back and forth building up the necessary pressure to finally make that move.
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This article was originally posted on FX Empire
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