The US dollar rallied during the week, breaking to a fresh, new high as we continue to see this market try to break out. Overall, this is a risk appetite based trade, as the 200 week EMA sits just above. Ultimately, the ¥111 level is an area that features a gap, so it is a target. Beyond that, the ¥112 level then gets targeted as well. Looking at pullbacks as a bit of value is probably the best way to go going forward. Ultimately, this is a market that looks likely to continue to see more of a push to the upside over the next month or so as we get the “Santa Claus rally” on Wall Street.
USD/JPY Video 02.12.19
Looking at the size of the candle, it is rather impressive as well, so it certainly sees the market looking very bullish on the sun, and I think it’s only a matter of time before the explosion of the momentum picks up the market somewhat like a “beach ball being held underwater” type of move. Ultimately, this is a market that seems to have a lot of support at the ¥108 level so that is essentially my “floor” at the moment. Remember, although the US dollar may slip a bit in more of a “risk on” type of environment, the Japanese yen gets pounded even harder so this market would be a bit of an outlier in that scenario. In fact, you will see the same move across the NZD/JPY pair, the GBP/JPY pair, and so on.
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This article was originally posted on FX Empire
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