The US dollar has fallen hard against the Japanese yen during the course of the week to break down below the ¥110 level. Ultimately, this is a market that I think is essentially “stuck” in this general area, and therefore it is not a huge surprise that we are dancing around yet again. At this point, I do not necessarily think that we are going to make a big move in the short term, because we are heading into the month of August when things are typically very quiet. Most large traders will be thinking more about beaches than they will trading charts.
USD/JPY Video 02.08.21
At this point, there is a massive amount of resistance above where the ¥112 level has pushed this market back down every time, we have tried to approach that level over the last several years. Ultimately, this is a market that I think will continue to see a lot of noise in that area so therefore I think we break out. To the downside, I see the ¥108 level as a support level, and a potential target if we break down.
I anticipate that the next several candlesticks will be back and forth, and therefore it is probably more likely than not to be a scenario where we will be looking towards shorter time frames than anything else, as the range is relatively tight, and is going to be difficult to trade the range with these higher time frames. That being said, it does make for a nice well defined area that you can trade on either the daily or the four hour charts.
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