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Christopher Lewis
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The US dollar has initially tried to rally during the trading session on Thursday, but at the ¥111 level continues to be a bit of a headache for the bullish traders out there. At this point, it looks like we are going to be ready to rollover just a little bit, and it does suggest also that we are going to stay inside the previous channel, so I think it is only a matter of time before we reach towards support underneath. That is the big question though, where would that support be?

USD/JPY Video 18.06.21

Obviously, the ¥110 level could be supportive, but I would not be surprised at all to see this market reached towards the 50 day EMA if we get a little bit of momentum. After all, the Federal Reserve rattled the market just a bit during the trading session on Wednesday, but the reaction was completely overdone. With that being the case, we will more than likely see a “reversion to the mean” rather soon, as the Federal Reserve and perhaps Jerome Powell himself, have a great history of clarifying themselves to pacify markets within a few days of any time they get rattled.

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With that in mind, I would not be surprised at all to see this market roll right back over. However, if we can overtake the ¥111 level, then it is very likely that we would see this market really start to take off, perhaps reaching towards the ¥112 level. However, one has to wonder whether or not we are trying to form a bit of a “double top” at this point as well?

For a look at all of today’s economic events, check out our economic calendar.

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