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Christopher Lewis
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The US dollar has rallied significantly during the course of the trading session on Wednesday as we have broken above the ¥110 level and of course the 50 day EMA. That is a good sign, but you can see that we have been chopping around for a while now, as we try to figure out where to go next. With that being the case, it does make a certain amount of sense that we would continue to see noisy behavior in general, and therefore you will need to size your position accordingly. To the upside, I see the ¥110.75 level is the next short-term resistance barrier.

USD/JPY Video 22.07.21

To the downside, I see plenty of areas that could offer support, especially near the 50 day EMA, and underneath there at the ¥109 level which has offered a certain amount of support recently. I think given enough time we will more than likely see plenty of buyers on dips, but it is worth noting that the area between ¥111 and ¥112 is considered to be massive resistance based upon longer-term charts. Because of this, I think that the upside is somewhat limited, and if we were to break out to the upside it would obviously be a huge “risk on move”, which would probably need some type of catalyst beyond everything that has been going on. Otherwise, if we do pull back, we could go as low as ¥107.50 to go looking for support again. The one main take away from this pair is going to be that it will remain choppy, with a little bit of more of an upward tilt than anything else.

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