The US dollar rallied a bit in Thursday’s trading session as we continue to climb the door to the ¥ 140 level. The ¥ 104 level has been significant more than once, so it shouldn’t be a huge surprise that we can go back there to test this area for resistance. What’s even more interesting is that the region where the 50-day EMA is starting to deteriorate. In fact, this will only strengthen that resistance as traders will run out of momentum once we get there.
USD / JPY Video 12.28.20
Don’t think we’ll just stop at the ¥ 104 level, it’s just the general “region” that we’ll start to see selling pressure, perhaps extending to at least the ¥ 105 level. For this reason, I’m just looking for signs of exhaustion that I can take advantage of as we’ve been in a long term downtrend for ages now. Stimulus from the United States and of course the appeal of the Japanese yen as a security currency, so there are two different reasons to think we might fall. After all that being said, it just goes with the trend.
On the downside, I think once we hit a new low we will be heading towards the ¥ 102 level, an area that has been important in the past. That being said, they’re not a fast-moving pair most of the time, as you can see we’ve been going back and forth. I predict that we will continue to see more of the same behavior in the future.
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