The US dollar has rallied a bit during the trading session on Monday to show signs of life again, as we continue to march right along the uptrend and channel that we have been in for a while. Because of this, I think the market is eventually going to reach towards the top of this channel, which coincides quite nicely with the ¥111 level above. That was the recent high, and that of course takes a certain amount of sense that we would see an attempt to get back there again.
USD/JPY Video 15.06.21
To the downside, the 50 day EMA sits at roughly ¥109, and has been very reliable recently. In fact, you can also make a bit of a trendline using that EMA, so it makes sense that people will continue to pay close attention to it. If we were to break down below the ¥109 level, then I think ¥108 makes the most sense, as the 200 day EMA is racing towards that area, which coincides quite nicely with the 38.2% Fibonacci retracement level.
With that being the case, the market is likely to continue the overall pattern that we have been in for a while, and therefore I think we will eventually find a reason to change the overall attitude to either be more bullish or bearish, but right now as we are sitting in the summer doldrums, I think it makes sense that we just continue more of the same, and I believe that we simply follow the overall pattern going forward, and therefore I would keep this simple and essentially follow what has been going on.
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