The US dollar has gone back and forth during the trading session in early hours on Friday. The ¥107 level continues to be massive resistance, so that’s something that should be paid attention to. Ultimately, I do think that the market will probably continue to consolidate, as the ¥105 level has been massive support. It’s been very tight all week, and I think quite frankly what traders are waiting for is to see whether or not there is a bit of a “risk on” reaction to the central bank speeches, sending stock markets higher. Typically, this pair will do the same thing as stock markets, but not always it just depends on the situation. Recently, we have seen it used as a bit of a risk barometer but it shows a lot of confusion as well.
USD/JPY Video 26.08.19
If we were to break above the ¥107 level, then we have to deal with the 50 day EMA as well. Beyond that, the ¥108 level will also offer resistance as will the ¥109 level. In other words, this is a market that will struggle quite a bit to go higher. Ultimately, this is a market that will be choppy or to the upside than it will to the down. This makes sense, because when people start selling this pair, they are looking for safety in the form of the Japanese yen. This is a well-known correlation, and therefore should not be a surprise at all if we see this happen.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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