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Christopher Lewis
USD/JPY daily chart, October 30, 2019

The US dollar has gone back and forth during the trading session on Tuesday, as traders await the interest rate statement coming out of the FOMC. Then of course has a lot of traders on edge and won’t want to put a lot of money into the market ahead of time. After all, this could change everything, and therefore change the risk profile of traders around the world. The 200 day EMA currently cuts through the last couple of candlesticks, and therefore it’s interesting to see how we are simply sitting here as well, as the market is looking at the 200 day EMA for direction.

USD/JPY Video 30.10.19

The 61.8% Fibonacci retracement level is sitting at the ¥109.50 level, where the market had broken down from previously. If we can clear that level, it’s very likely that we go towards the 100% Fibonacci retracement level at the ¥112.40 level. If we pull back from here, I like the idea of buying based upon support. At this point, the market looks very likely to make its decision based upon the FOMC statement, and whether or not the Federal Reserve is hawkish or dovish. The more dovish they are, it’s very likely that this pair will rally which at first blush might be a bit counterintuitive as it should be negative for the US dollar, but the Japanese yen is considered to be the “safest currency”, so therefore it sells often times of “risk on.” At this point, I like the idea of going higher just simply because the market has been so resilient over the last couple of weeks.

Please let us know what you think in the comments below

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