The US dollar has fallen rather hard early in trading on Wednesday, reaching down towards the ¥105 level. This is an area that has been supportive for some time, but we continue to test it time and time again. At this point, it is more than likely only a matter of time before we break down through it, it would we do it is likely that we will go down to the 104.33 level, an area where we have seen buying in the past.
USD/JPY Video 17.09.20
If we were to break down below the 104.33 level, then it is likely that we go looking towards the 102 level underneath, an area that has been massive support in the past. Ultimately, I do think that it is only a matter of time before we see a bit of a bounce, but it will more than likely be sold into. The 50 day EMA above has been sloping lower for some time, and it has offered resistance in the past. A break above the 50 day EMA could open up a move towards the 200 EMA level, but somewhere between the 50 and the 200 day EMA I would anticipate a significant amount of resistance.
Ultimately, the Japanese yen continues to strengthen overall, as we have seen a little bit of an uptick in inflation when it comes to Japan, albeit just barely. With that being the case, I like the idea of fading this market every time it rallies, and fully anticipate that we will break down eventually. Jerome Powell might be the cause.
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