The US dollar has gone back and forth during the trading session on Friday, as we continue to struggle at this major figure. Looking at the longer-term chart, the ¥105 level on the bottom is the bottom of a major consolidation area. The ¥115 level above is massive resistance. In other words, that makes the ¥110 level as a bit of a “fair value area” as it is the middle of the overall consolidation range. The ¥110 level is essentially where buyers and sellers are coming together.
USD/JPY Video 17.02.20
I do think that it is only a matter of time before the market needs to make a significant choice, and that choice should lead to a longer-term trade. By being patient and waiting for that to happen, you have the ability to make a bigger move.
If the market was to break above the recent high, then it’s likely that the USD/JPY pair goes looking towards the ¥111 level, and then possibly even the ¥112.30 level. To the downside, the market breaking below the uptrend line could send this market much lower, down to that ¥105 level. At this point in time, the market is likely to be very choppy and volatile so it’s difficult to imagine putting a lot of money to work. However, as soon as we get some type of clear break in one direction or the other, then we should be able to put a lot of money to work. Keep in mind that this pair is highly sensitive to risk appetite overall, rising and falling with that attitude.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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