The US dollar has initially fallen during the trading session on Thursday, reaching down towards the ¥107 level. At this point, the market found buyers, mainly due to the idea that there was a false rumor out there suggesting that the Chinese were leaving the trade talks with the Americans rather quickly. That being said though, it turned out to be proven incorrect, and the market has turned around completely. You know what they say, hope burns eternal so therefore it’s likely that the “risk on” trade is probably on effect in the short term, but there are major barriers above to overcome.
USD/JPY Video 11.10.19
We have the 200 day EMA which is just above the most recent rally, and it’s likely that the market won’t be able to break above there. However, if we do get some type of positive momentum coming out of the Americans and Chinese meeting, then it’s possible that we could break out above there and go looking towards the ¥110 level. Ultimately though, it’s very likely that signs of exhaustion will come into the market and roll the pair right back over. With that, I’m looking for signs of exhaustion to fade but recognize that the next 24 hours might be somewhat positive. To the downside, the 50% Fibonacci retracement level has been very supportive, so if that were to give way the market will probably unwind quite drastically. This would almost certainly have something to do with the US/China trade talks.
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This article was originally posted on FX Empire
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