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Christopher Lewis

The US dollar initially tried to rally against the Japanese yen on Monday, as there was a bit of a “risk on” move, but as you can see the market fell back towards the ¥107.50 level, an area that it seems very familiar with. It also features the 50 day EMA so it is likely to pay attention to that moving average as it has several days in a row. To the upside, the 200 day EMA seems to see a lot of selling pressure, so I do not think we get above there anyway. After all, the 200 day EMA does tend to attract a lot of attention, so it does make sense that we would fail even if we did get all the way up to that level. I think at this point the market is likely to continue to see a lot of choppy behavior, as the market simply has nowhere to be anytime soon.

USD/JPY Video 07.07.20

Keep in mind that both of these are “safety currency”, so that does not help anything either. To the downside if we were to break down, the ¥106 level is likely to be a major support level as it has formed a bit of a “double bottom”, so if we were to break down below there it is likely that the market would continue to break down and reach towards the ¥105 level. A breakdown below that level could open up the “trapdoor” to much lower pricing. If we did somehow break above the 200 day EMA, I think there is significant resistance at the ¥110 level.

For a look at all of today’s economic events, check out our economic calendar.

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