The US dollar has pulled back just a bit during the course of the trading session on Monday initially, but then turned around to reach towards the ¥110 level. The ¥110 level is an area that I think will continue to offer quite a bit of interest for traders as it is a bit of a “magnet for price.” Ultimately, the ¥110.75 level is an area above that I think will cause a certain amount of resistance, just as the ¥109 level underneath will cause a certain amount of support. Furthermore, the 200 day EMA is reaching towards the ¥109 level, so that makes it even more interesting.
USD/JPY Video 31.08.21
On a move below the support, I believe that this market probably opens up a move down to the ¥107.50 level, and then possibly even as low as the ¥105 level. On the other hand, if we were to turn around a break above the ¥110.75 level, we will more than likely go testing the ¥112 level bone, which has been a massive resistance barrier on longer-term charts. Because of this, the market would very likely see a lot of pressure in that general vicinity, and I do not necessarily think that we are going to break out above there.
The market breaking above that would obviously be crucial to pay attention to, as it would be an area that the market had struggled with for what seems like a lifetime. Breaking out above there would change the entire complexion of the market, something that I do not see happening anytime soon. I frankly, I expect to see more of the same that we have had over the last couple of months.
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