The US dollar rolled over a bit during the trading session on Wednesday, as the ¥110 level has been important as resistance more than once. Beyond that we have the 50 day EMA that is offering significant resistance and sloping lower which of course is a negative sign. That being the case, I think that the market is ready to roll over even further. furthermore, we have the 61.8% Fibonacci retracement level offering significant resistance just above as well, as it typically will do.
USD/JPY Video 07.02.19
Looking at the chart, I suspect that it will be choppy between now and the target below near the ¥108 level. It’s going to take a while to get there, so what I’m looking at is shorting selling opportunities the show signs of exhaustion. Because of this, you will probably have to focus on shorter-term charts, with an eye on the longer-term move to the downside. The US dollar is of course being held hostage by the Federal Reserve which has recently suggested that it was becoming more dovish, something that will not be good for the currency.
On the other side of the trade, if we can break above the 61.8% Fibonacci retracement level, then we will enter an area that has a lot of noise attached to it, meaning that it will be very sluggish indeed. In fact, I don’t think that the market will be impulsive, rather it will just simply grind back and forth but I do believe that the downward trajectory is set.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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