The US dollar gapped lower to kick off the trading session, but then rallied quite significantly to fill that gap. This is more than likely due to the fact that there was a bit of fear at the beginning of the session, but also there were a lot of concerns to begin with. The question now is whether or not we can break out of the consolidation area that we have been in. The ¥107 level above is the resistance, while the ¥105 level as support. At this point, the market is very likely stay within this range, because we have a lot of uncertainty out there. Beyond that, we also have the jobs number coming out on Friday so it’s difficult to imagine a scenario where a lot of money flows in one direction or the other unless of course it has something to do with panic.
USD/JPY Video 03.09.19
If we were to break down from here, then I think the market goes looking towards the ¥102.50 level, perhaps possibly even the ¥100 level. To the upside, we will have to deal with the 50 day EMA which is now crossing the ¥107 level. This adds more credence to the resistance, and of course the fact that a lot of people probably won’t be jumping into a lot of risk ahead of the figure this Friday, it makes sense that we probably stay within the range because the risk to a trading account is great over the next couple of days. Beyond that, keep in mind that Monday was also Labor Day in the United States.
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This article was originally posted on FX Empire
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