The US dollar has rallied a bit during the trading session on Thursday, reaching towards the ¥110 level, an area that will have a certain amount of psychological resistance built into it. If we can break that level, then it’s likely that we go looking to fill the gap at the ¥111 level, and then eventually the ¥112.50 level which is the 100% Fibonacci retracement level. We are trying to break out for a bigger move based upon a “risk on” appetite, and I do think that happens given enough time due to the fact that other risk related currency pairs are starting to show the same thing.
USD/JPY Video 27.12.19
We are recently crossed the 50 day EMA above the 200 day EMA, showing signs of bullish pressure as it is a “golden cross” be informed. That is a longer-term “buy-and-hold signal”, and therefore I like the idea of hanging on for a longer-term move above the ¥110 level and it’s difficult to see what happens between now and New Year’s Day other than a lot of erratic and thin trading. Pullbacks at this point should continue to find plenty of support underneath, initially at the ¥109.15 level, and then the ¥108.50 level.
I do look at this as a market that you should be looking for value on pullbacks. I don’t have any interest in shorting, until we break down below the ¥108 level, which would be very difficult to do in the short term, barring some type of horrific headlines coming out of the US/China trade situation.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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