The US dollar has rallied rather significantly during the week, reaching towards the ¥108.50 level. That’s an area that will cause quite a bit of resistance, and at this point it’s very likely that we need to see some type of resolution with the US/China trade situation to get this market going to the upside. If not, then the market is very likely to roll over towards the ¥107 level. Breaking below the bottom of the weekly candle stick should send this market down to the ¥105 level, which was even more supportive.
USD/JPY Video 14.10.19
At this point, the market is likely to be a headline driven more than anything else, which should not be surprising considering that all markets are behaving like that right now. The market will be choppy to say the least, but at this point it comes down to whether or not the Americans and the Chinese can get it together. It does not look promising for a longer-term trade, so disappointment could very well be in the cards. Longer-term, we will eventually make a decision but longer-term traders will probably continue to be exacerbated by the volatility and choppiness found in this very risk sensitive pair. Ultimately, we will eventually make a decision but it comes down to headlines at this point so it’s difficult to put longer-term money to work in this type of scenario.
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This article was originally posted on FX Empire
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