The US dollar initially tried to rally during the trading session on Wednesday but continues to find quite a bit of resistance above the ¥111.50 level, extending towards the ¥112 level above there. At that point, there is a lot of massive resistance so it’s going to be very difficult to break out at this point. While waiting for the Federal Reserve, we will have to see how things pan out from that announcement to see whether or not it gives us an opportunity to see volatility in this pair. A break above the ¥112 level obviously is very bullish.
USD/JPY Video 21.03.19
The alternate scenario of course is that we break down below the 200 day EMA, pictured in black, and the 50 day EMA, pictured in red. If we do that then I believe there would be enough technical damage in the market to see a break down towards the ¥110 level, possibly even the ¥108 level after that. This is a market that obviously been struggling for some time, so the one thing that we need to see is some type of impulsive candle stick. Until we get that, it’s essentially a back-and-forth choppy market that is only good for 15 to 20 pips at a time.
Overall, this is a market that I see as “dead money” at the moment, but I also believe that we will eventually get some type of explosive breakout that we can take advantage of. That will be shown by a long and impulsive candle stick on the daily chart that will be obvious.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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