The US dollar has found itself to be relatively quiet against the Japanese yen during the trading session on Thursday, as we see the ¥107.50 level as a major barrier to overcome. Ultimately, I think that the market is likely to see a lot of noise and choppiness more than anything else, so if you are a short-term trader this is a market that you will probably like quite a bit. Beyond the ¥107.50 level, I see a significant amount of resistance all the way to the ¥108 level, as it has been resistive in the past and of course we have the 200 day EMA sitting in that general vicinity. Think of this as a “zone of resistance” that the market will struggle to break out of.
USD/JPY Video 24.07.20
To the downside, I see the ¥106.75 level as a short-term support level, but I also recognize that the ¥106 level is crucial as we had recently formed a bit of a “double bottom” in that vicinity. If we were to break down below that level it could open up a move down to the ¥105 level, followed by the ¥102 level. The major moving averages are sloping lower, but ever so slightly. Because of this I think that the market is likely to grind lower more than anything else. At this point in time it is likely that we will see a slow drift lower and therefore it is possible that the best trade is to simply fade short-term rallies for small moves to the downside. At this point I think that is probably about as good as this gets.
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