The US dollar has rallied a bit during the trading session on Wednesday to reach above the ¥110 level but continues to find sellers just above there. At this point, it’s not until we make a fresh, new high which is near the ¥110.40 level that I would be willing to put money into the market to the upside. More likely than not, there probably is a pushback coming as this level has been crucial for longer-term trades.
USD/JPY Video 13.02.20
Furthermore, if you look at longer-term charts, the ¥110 level is essentially “fair value” as it is the middle of the larger range. The ¥105 level underneath is massive support, while the ¥115 level above is massive resistance. By doing simple math, you can see that ¥110 level is a crucial fulcrum point. This explains why it is so difficult to get above it at the moment, as we are rising from such extreme lows. The next swing is going to be crucial though, because if it ends up being a lower high, then it could lead to something much bigger. However, we do make a “higher high, then I think we continue to see more or less a grind higher as it would be constructive as far as risk appetite is concerned, something that is a bit shaky at the moment. Ultimately, the next couple of days will be crucial in considering that we are at an area where I don’t see much of an edge one way or the other, it is probably advisable to simply observe.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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