The US dollar has fallen a bit during the trading session on Wednesday, as we continue to bounce around the same area of importance. The ¥109.70 level is the beginning of pretty significant resistance and could open the door to the ¥110 level if we do break above there. After that, then I think we will go looking to fill the gap which is closer to the ¥111 level above. That could be a nice attempt to fill the gap, but we need some type of good news to make that happen.
USD/JPY Video 16.05.19
Below, we see a significant amount of support at the ¥109 level, an area that is important from not only being a round number but also an area where we have seen support and resistance previously. If we break down below there, the market should then go to the ¥108 level where I think you will start to see a massive support barrier come into play.
Quite frankly, this is probably a scenario where you will watch the pair trade somewhat lockstep with the S&P 500, so you should keep an eye on what’s going on over there. It’s been erratic to say the least, so that of course doesn’t necessarily help this pair. If we can break out to the upside, then it’s very likely that this pair will follow. If we don’t and start to break down, it’s likely that the Japanese yen would get a bit of a bid, in an attempt to find safety.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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