The US dollar has rallied a bit during the trading session on Wednesday, breaking above the ¥105 level. By breaking above there, it does open up the possibility that we are going to go higher and go looking towards the 50 day EMA. The 50 day EMA currently sits at the ¥106 level, and that could be the “one-two punch” for the US dollar against the Japanese yen, so this may simply be another bounce that is looking for sellers. With this, it is likely that the market is going to continue to fade into signs of exhaustion, so keep that in mind.
USD/JPY Video 24.09.20
To the downside, the ¥104 level has caused a significant amount of support in the past, so if we were to break down below that level it is likely that we could go looking towards the ¥102 level, and then possibly even the ¥100 level. All things being equal, that is what I anticipate seeing, and it should be noted that the 50 day EMA has caused significant resistance in the past, so I would anticipate that a lot of technical traders will be looking at that area as a potential place to start shorting again.
A break above that level of course would be very bullish, so that of course is worth paying attention to as well, perhaps opening up the possibility of a move towards the 200 day EMA above, which is at roughly ¥107.25, and will attract quite a bit of attention from the longer-term traders out there. Expect volatility, but we are still very much in a downtrend.
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This article was originally posted on FX Empire
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