The US dollar has rallied a bit against the Japanese yen initially during the trading session on Wednesday, but as you can see has given back a bit of strength. At this point, I think we are trying to build up a little bit of support in this area, especially as the 50 day EMA is sitting just at the 200 day EMA and likely to cross. If it does in fact cross, it becomes the “golden cross” which is a longer-term “buy-and-hold” scenario. The 100 day ¥0.50 level looks to be supportive, and therefore it’s likely that we do get a bit of a bounce.
USD/JPY Video 12.12.19
Ultimately, if we can break above the top of the range for the trading session on Wednesday, then it also shows that we could go much higher and reach towards the crucial ¥110 level. The ¥110 level is the gateway to much higher pricing and opens up the possibility of the market moving towards the ¥111 level given enough time. Beyond that, we then have the ¥112.50 level, but we need some type of “risk on scenario” that we can continue to go forward. That being said, this is a market that I think continues to see a lot of volatility. I favor the upside, but I also recognize that the market will continue to go back and forth on the latest risk appetite based headline. Obviously, this is a very jittery market as it gives back and forth as to whether or not the Americans and Chinese can come together.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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