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Christopher Lewis
USD dollar

The US dollar has shown itself to be very resilient against the Japanese yen, although it has been essentially flat for several weeks. The ¥107.50 level continues to be a bit of a magnet for price, so it is not surprising to see that we ended up spending quite a bit of time there during the week. We are pulling back from there just a bit though, so I think what we are looking at is a scenario where we continue to grind sideways until some type of major decision is made with the global markets. Right now, everybody is trying to decide what is more important: The Federal Reserve loosening monetary policy, or the coronavirus affect?

USD/JPY Video 20.07.20

With this being the case, it is difficult to get overly excited about either one of these currencies because they can both be used as a safety currency’s depending on the situation. Having said that, we do have a significant uptrend line underneath, which could offer a bit of support. At this juncture, a break down below that level could open up a move to the ¥105 level followed by the ¥102 level. To the upside, I think there is a significant amount of resistance but if we were to clear the last couple of candlesticks to the upside, it is likely that we could go towards the ¥110 level, but that is about as far as we go from what I can see right now. With the way the Federal Reserve is behaving, it is not surprising that the dollars somewhat soft.

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

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