The US dollar pulled back a bit during the trading session on Wednesday, breaking down below the bottom of the shooting star that formed during the previous trading session. At this point, the market has skyrocketed into the ¥110 level, but ran into a lot of resistance. At this point, the market has simply run out of steam, which of course makes quite a bit of sense considering that we had shot straight up in the air. The market does look as if it is trying to break out to the upside but obviously this is an area that is going to be difficult to get through, so at this point a pullback could be a nice opportunity to finally build up enough momentum to reach to the upside. If we can break above the top of the candlestick during the trading session from Tuesday, then it’s very likely that a significant break out will occur.
USD/JPY Video 16.01.20
The United States and China are signing a trade deal, and at this point it’s likely that the market has already priced this in. The question now is going to be whether or not there is more momentum going forward for some type of an agreement, because that would also be a “risk on” situation that should send this market higher. I think at this point it’s likely that we will continue to see that, but the market is probably going to be looking for value in the meantime. At this point, seeing some type of a bounce is probably necessary in order to get involved, because buying a bit this area is going to be chasing the trade. However, after seeing the explosive move higher, it’s difficult to try to short this market, even if we do pull back.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Next Upside Target Angle at 29153
- Gold Price Prediction – Prices Rally Post Trade Agreement Signing
- AUD/USD Price Forecast – Australian Dollar Shows Signs Of Resiliency During Wednesday
- Crude Oil Price Forecast – Crude Oil Testing Fair Value
- U.S. Dollar Index Futures (DX) Technical Analysis – Next Major Downside Target 96.700
- Gold Price Forecast – Gold Markets Stabilize A Bit On Wednesday