The US dollar fell rather significantly during the trading session on Tuesday, breaking below the ¥113 level at one point. However, there is a lot of support between here and the ¥112 level, based upon order flow that has previously presented itself. Beyond that, there’s also a massive uptrend line and the 200 day EMA. In other words, I think this is going to end up being a buying opportunity. That doesn’t mean that we are going to break out to the upside anytime soon, I think it just continues to be more of the same.
USD/JPY Video 05.12.18
The reason I say this is that the ¥114.50 level is the beginning of massive resistance that extends to the ¥115 level. I think it’s going to take massive amounts of momentum to finally break through there, perhaps some type of agreement between the United States and China it may be one of the main drivers. That’s assuming that we even get one. It’s going to take something rather monumental.
Otherwise, if we break down below the 200 day EMA, then I think that this pair unwinds rather drastically. I’ve been speaking to some of my friends on Wall Street recently who are starting to expect Japanese yen strength in 2019, but in the short term we need to break through this massive support for me to advocate shorting this pair. So far, buying the dips has worked out quite nicely. However, if we were to break down, I think the ¥110 level will be the first target, followed by the ¥108 level.
This article was originally posted on FX Empire
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