The US dollar has tried to rally during the week but continues to struggle at the 200 week EMA. Not only that, we have to worry about the ¥110 level, which of course is an area that should cause some resistance due to the fact that it is a large, round, psychologically significant figure, and if you look on the daily chart you can see that there is a clear major selloff at that point. If we can break above it, that frees the market to go looking towards the ¥111 level, which features a small gap. If we can break above there, then the market is likely to go looking towards the ¥112.50 level after that.
USD/JPY Video 30.12.19
Short-term pullbacks should continue to find plenty of buyers at the ¥108.50 level, as it has offered significant support more than once. At this point the market will probably struggle until we get into the higher liquidity, which will be closer to the following week. I do have an upward bias at this point, but I also recognize that markets might be rather quiet due to the New Year’s Day celebrations, and the fact that full liquidity isn’t there. This pair has been extraordinarily quiet over the holidays, and I expect more of the same in the short term. However, on a daily close above the ¥110 level, that’s a clear bullish sign that we should continue to go much higher. On the other hand, if we break down below the ¥108.50 level on a daily close, that would be very negative.
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This article was originally posted on FX Empire
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