The US dollar has rallied significantly during the trading session on Tuesday, breaking above the top of the shooting star that formed on Monday. Quite frankly, after Monday’s candle I suspect that we would drop to fill the gap, but there should be plenty of support in that area, roughly the ¥108 handle. I also recognize that there is support just below at the 61.8% Fibonacci retracement level, so overall I would believe that there are plenty of buyers underneath to pick this market up. It will also move with risk appetite, so pay attention to other markets such as the S&P 500 which is my favorite secondary indicator for this pair.
USD/JPY Video 12.06.19
To the upside, we are probably going to try to wipeout that breakdown candle that fell from the ¥109.60 level. Whether or not we can break above the ¥109.70 level is going to be the next question, and if we do then I think we could finally go towards the ¥111.15 level which features a gap. I think that we will see the occasional short-term pullback, but it certainly looks as if there will be plenty of buyers underneath to support the market. I don’t have any interest in shorting this pair in the meantime, but if we were to break down below the 61.8% Fibonacci retracement level it probably will send this market down to the 105 young level underneath which is essentially the 100% Fibonacci retracement level. Until then, I think that we have a slow grind higher.
Please let us know what you think in the comments below
