Christopher Lewis
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USD/JPY Video 08.06.20

The US dollar has exploded to the upside during the week, reaching towards the ¥110 level. This was exacerbated by a better than anticipated jobs number in the United States. That is an area that is obviously psychological in nature and has been a significant support and resistance barrier. With that in mind, I suspect that we are probably looking at an area that could cause a bit of a pullback rather soon.

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With that being the case, I think we are looking at a market that is trying to carve out a range, and we are simply getting close to the top of that range. With that being the case, I would fully anticipate some type of break down, if for no other reason than to build up the necessary momentum to break out to the upside.

However, if we do clear above the ¥110 level, then the market is likely to go towards the ¥111 level. Ultimately, this is a scenario where I would anticipate a lot of most traders out there looking to get involved but buying up here at the top of what has been a fairly reliable range is a great way to lose money. Because of this, you will need to be patient and recognize that there are going to be plenty of opportunities. Pay attention to next week’s candle, that should give us an opportunity to place a better trade. Ultimately, that is probably the best way to go, and I would look for some type of value proposition if you want to go long. However, exhaustive candlesticks could also invite selling and what is most certainly an uncertain world.

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

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