The US dollar has rallied during the trading session on Friday, gaining against the Japanese Yen yet again. We have pierced the ¥109.50 level, and it looks as if we are trying to get to the ¥110 level. This has been a major barrier for some time and if we can break above that barrier, it’s very likely that the pair will continue to go much higher, reaching towards the ¥111 level, and then eventually the ¥112.50 level. The ¥111 level offers a significant gap that has yet to be filled, and therefore it is crucial to pay attention to. Looking at the way this market has slammed into this barrier, it would not be a surprise at all to see a little bit of a pullback. The next important signal will be whether or not the next low is higher or not. If it is, then it shows in an increasing amount of bullish pressure.
USD/JPY Video 16.12.19
The alternate scenario is that we simply slice through the ¥110 level, and of course then it is a signal to start buying. All things being equal, I do like buying this pair, but we need good news coming out of the trade war, which in theory as happen but the announcement as per usual is a little light on the details at this point. The 50 day EMA has recently crossed above the 200 day EMA and that of course is a positive sign in the form of a “golden cross”, which is something that brings a lot of longer-term money in. If we can simply just break above the top of the ¥110 level, the move higher should be rather brutal.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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