The US dollar had initially tried to rally during the trading session on Friday, but then pulled back from the 50 day EMA again. This is an area in general that has been relatively important anyway, as we are dancing around just below the ¥109 level. This is a market that also has the 200 day EMA underneath that could offer support, right along with the up trending channel. With that being the case, the market is quite obviously ready to find some type of support underneath, but over the last 48 hours we have seen the market go back and forth which of course needs to happen is stability does in fact come back into play.
If the market can turn around in recapture the 50 day EMA, it’s likely that we go looking towards the ¥110 level. That is an area that is going to continue to attract a lot of attention but if we can clear that area then it’s very likely that the next move will be to the ¥111 level, an area where we have seen a gap lately. To the downside, the uptrend line should hold but if it does not that could open up a move all the way down to ¥105, which is the bottom of the longer-term range that the market has been in for months. This pair of course moves back and forth with risk appetite, and with the coronavirus raging in China, that of course is something that continues to be a major concern and could drive this pair back and forth.
This article was originally posted on FX Empire
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