The US dollar initially rally during the trading session on Monday to reach towards the ¥107.50 level, an area that has been a magnet for price going forward. Because of this, the market is going to continue to see a lot of volatility near that area, as we have seen both buyers and sellers. The 50 day EMA has been bouncing around this area for some time as well, so technical traders will probably pay attention to this region.
USD/JPY Video 30.06.20
If we were to break above the ¥107.50 level, then the market is probably going to go looking towards the ¥108 level. A break above there allows the market to go looking towards the 200 day EMA, possibly even the ¥110 level. That being said, we need some type of good news to push the market towards that area, as this pair does tend to move up and down with stock markets as well.
To the downside, the ¥106 level has offered a bit of a “double bottom” so far, and as a result that should continue to be a major support level. A breakdown below that level could open up fresh selling, but it is unlikely to happen in the short term. However, if we get some type of major breakdown under that point, it could signal a lot of trouble going forward and therefore could be a massive “risk off” market just waiting to happen in general.
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