Christopher Lewis
Add to Bookmarks

The US dollar has rallied a bit during the trading session on Wednesday, as the ¥110 level is crucial for the longer-term trading ranges, as the market continues to bounce around between the ¥105 level on the bottom, and the ¥115 level on the top. In other words, the ¥110 level is essentially what the “fair value” of this pair should be. Ultimately, this is a market that is all over the place but keep in mind that the coronavirus continues to cause issues.

USD/JPY Video 27.02.20

The Japanese economy is presently looking at a recession, and as a result it continues to punish the Japanese yen itself. Ultimately, this is a market that continues to see noisy conditions, but I do think that overall the US dollar continues to attract a lot of attention. Furthermore, the stock markets in America have been a bit oversold and this could mirror what happens next. If that’s going to be the case, then it’s very likely that the market continues to see upward pressure, but definitely in a significantly erratic fashion. That being said, if we were to break down below the ¥109.50 level it would completely change the attitude of the market and could send this pair much lower. At that point I would anticipate that the market probably goes looking towards the 200 day EMA underneath.

Know where the Market is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

All that being said, this looks to me a lot like a market that has broken out, rallied significantly, came back to test that previous resistance, and now is trying to bounce again. In other words, it’s classic technical analysis as far as breakouts are concerned.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker