The US dollar has rallied slightly during the trading session on Friday, but quite frankly it has not impressed and has done very little in relatively quiet trading. In fact, the trading has been eerily quiet. We have recently seen a massive shot higher, and now have pulled back towards the 50 day EMA. I do believe that it is only a matter of time before we get a bit of a bounce, but it’s a lot to ask on Friday for the market to suddenly shoot straight up in the air. That being said, expect a little bit of a pullback before we bounced again, reaching towards the highs. If we can break above the highs, then we could go towards the ¥111 level. Even if we do break down below the 50 day EMA, I believe there is plenty of support underneath at the ¥109 level.
USD/JPY Video 27.01.20
To the upside, if we can break above the ¥111 level, the market could go looking towards the ¥112.50 level. At this point, there are a lot of people speaking of Japanese yen strength due to the coronavirus break out, but that’s absolute nonsense. The pullback has not been significant enough to even remotely suggests some type of panic, and to suggest that a few hundred people being sick is going to move the entire currency markets is lazy reporting to say the least. The technical analysis tells you where the money flow is going, and currently it looks like we are going to pull back a bit, but we have been grinding higher for a while, and under fundamental reasons. With that, I’m looking for a bounce, but it is probably going to be closer to the 50 day EMA.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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