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Christopher Lewis
USD/JPY daily chart, August 29, 2019

The US dollar has gone back and forth during the trading session on Wednesday as we continue to question where the global economy is going. The ¥105 level underneath is massive support, just as the 107 Yen level above is massive resistance. Beyond that, the 50 day EMA is starting to attach itself to the ¥107 level, it’s likely that we will continue to see a lot of selling in that area. I believe that this market will continue to go back and forth in this 200 point range but one thing that we have noticed recently is the highs are starting to gradually get a little bit lower.

USD/JPY Video 29.08.19

The Monday break down was pretty significant, as we broke down below the ¥105 level for the short term. We bounced back above there, but it did make a “lower low” and one would have to think that there is a certain amount of structural damage that had been done. If we were to break down below that level, it’s likely that the market would go down to the ¥102.50 level. After that, we could be looking at the ¥100 level, which probably won’t be something the Bank of Japan wants to see.

The alternate scenario is that we finally break above the ¥107 level, but that seems to be very unlikely at this point. If we do that though, I think the ¥108 level would be the target, and then perhaps the 200 day EMA which is painted in black on the chart. Things certainly look negative at this point though.

Please let us know what you think in the comments below

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