USD/JPY Midday Technical Analysis October 31

The one ¥13.50 level above is resistance on the longer-term charts, and I think it’s likely that we will probably see a continued bullish momentum overall, I think it may be a bridge too far in the short term environment. Quite frankly, as I watch the stock markets look a bit overdone in the short term, and we have seen this more than once, where the buyers come out hand over fist only to get slammed back down. I think that the stock markets haven’t flushed themselves out completely so that would be a bit of a head wind as well.

USD/JPY Midday Video 31.10.18

However, I invite you to look at the trajectory of the rally that we have seen recently and recognize that it is a bit overdone. I’m not necessarily saying that we need to break down drastically, but I do recognize that perhaps we are overbought, meaning that we need to pullback to a more sustainable level and I think the initial one would be the ¥113 level. That’s an area that I would expect a significant amount of interest in. I also believe that the ¥112.50 level underneath will also be attracted to traders, so keep that in mind as well.

If we were to break above the ¥113.50 level, then I think we go to ¥114, and then eventually test the major resistance at the ¥114.50 level after that.