The US dollar has bounced a bit during the trading session on Wednesday, as we have seen a lot of volatility in this pair. It seems that every time we try to rally, we fall right back down. It makes sense though because there is so much in the way of resistance at the ¥114.50 level, which extends to the ¥115 level. Ultimately, there is a nice uptrend line underneath that should continue to keep this market afloat. Beyond that, the 200 day EMA underneath should also offer a bit of support, right along with the ¥112 level. At this point, I don’t think that we will be able to break above the resistance at the ¥114.50 level, because it has been so important over the longer-term.
USD/JPY Video 06.12.18
That being said, if we do break above there we could continue to go much higher, perhaps more of a “buy-and-hold” type of situation. Ultimately, if we break down below the 200 day EMA, that could send this market much lower, perhaps down to the ¥110 level, maybe even the ¥108 level. I think we are at a very important inflection point for the USD/JPY pair, and therefore I think we will find some type of major move relatively soon, but it may not be in until we get past the holiday season. In the meantime, short-term traders continue to buy the dips as we have a significant amount of support showing itself every time we do drop. That being said, the range of trade is starting to tighten, meaning that we will more than likely get an explosive move. Be cautious.
This article was originally posted on FX Empire
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