The US dollar pulled back a little bit to kick off the trading session on Monday, but then rallied a bit. It looks as if we are in a bit of a consolidation area right now, and I think this pair will be highly volatile and sensitive to the trade talks between the Americans and the Chinese. After all, the Yen is a proxy for Asia in general.
USD/JPY Video 19.02.19
Looking at this chart, you can see that the 200 day EMA is just above and near the ¥111 level. Because of this, I think that the upside is somewhat limited in the short term, as we are right in the middle of a cluster of trade from December, so I believe this is going to be very difficult to get past. This is an area that I think will cause a lot of noise so therefore short-term trading is probably about as good as it gets.
Just above I see even more resistance in the form of the ¥111.50 level, so I think that although it looks like we are ready to rally again, it’s probably more of a consolidation play than anything else. If we break down below the lows of the Friday session, that could unwind this pair down to the ¥109.50 level next. Overall, this is a pair that is going to be focusing on the short time more than anything else.
Please let us know what you think in the comments below