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Christopher Lewis
USD/JPY daily chart, December 03, 2019

The US dollar has rallied a bit against the Japanese yen during the trading session early on Monday, as we are getting tantalizingly close to a breakout. If the pair can get above the ¥110 level, it’s very likely to continue going higher, as it will be a breach of major resistance. Ultimately, that could open up the door to the ¥112.50 level, which would be a move back to the 100% Fibonacci retracement level. Between here and there, the ¥111 level could cause some issues, so be aware that we may get a bit of a pullback from that level on the way higher.

USD/JPY Video 03.12.19

Underneath, we are getting very close to the idea of a so-called “golden cross” underneath, near the ¥108.50 level. That is when the 50 day EMA crosses above the 200 day EMA in a bullish sign of momentum. Ultimately, this last impulsive move has done a lot of damage to the sellers, and more importantly the overall resistance of the market. It is probably only a matter of time before we take off to the upside and good news coming out of the economic situation around the world certainly could be a major catalyst as we have a lot of risk appetite built into this currency pair. With that, I believe that buying dips will continue to work and it’s more than likely going to be a scenario where the 200 day EMA will start to offer a bit of a “floor” in the market once we get that cross, as is customary on longer-term charts. Look for a daily close above that crucial ¥110 level before buying, but at that point this thing should take off.

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