The US dollar has found itself well supported against the Japanese yen over the last week, forming a nice-looking hammer at the important ¥109.70 level. At the bottom of the hammer we have the ¥109 level, which of course is crucial from a large, round, psychologically significant standpoint. If we can break above the top of the candle stick, that is a good sign and could send this market looking towards the ¥111 level rather quickly, which is the scene of a small gap that has yet to be filled.
USD/JPY Video 20.05.19
If we can break above that level, then the market probably goes to the ¥112 level, which is an area that also features a lot of resistance. However, there is also the alternate scenario that we break down below the hammer for the week, that opens up a floodgate of selling pressures to reach down towards the ¥108 level. Looking at the chart, it does look as if we are trying to find our footing, and therefore it’s likely that the buyers will continue to enter this market. This will be especially true if stock markets can stabilize and go a bit higher as this pair to the follow them. However, if we get some type of extraordinarily negative news from a geopolitical or a macro view, that could send this market much lower as money would run to the safety of the Japanese yen.
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This article was originally posted on FX Empire
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