The Euro rallied a bit against the Japanese yen early on Tuesday to fill the gap from the weekend open. This is quite common in the Forex market, and quite often will attract selling once we get to the top of that gap. Ultimately though, if we can break above the ¥120 level it’s likely that the market could continue to go a bit higher.
Looking at the 50 day EMA it is currently slicing right through the candlesticks, with the 100 day EMA just above at roughly ¥120.50. We are most certainly in a downtrend and there are plenty of things out there that could spook the market in two buying the Japanese yen again. Looking at the market, we could go down to the ¥116 level to simply continue the overall move without making a fresh new lows. All things being equal, it would take a lot of good news to turn this market around, especially considering that the EUR/USD pair is struggling as well, so that should continue to suggest that the Euro itself might be a bit soft.
We did have a massive move higher before the gap lower, so keep in mind that this might be a choppy fight all the way down. That doesn’t mean that we can’t break down, just that it may not be a massive and quick move. This might be more of a multi week trade. However, if we were to break above the ¥120 level, then we probably won’t see massive selling until we get closer to the ¥121 level above which is where massive selling had occurred previously. Finally, the 50% Fibonacci retracement level is in the same neighborhood as well, so that’s another reason why I think this market may break down from here and continue the overall downtrend.
Looking at the 50 day EMA it is currently slicing right through the candlesticks, with the 100 day EMA just above at roughly ¥120.50. We are most certainly in a downtrend and there are plenty of things out there that could spook the market in two buying the Japanese yen again. Looking at the market, we could go down to the ¥116 level to simply continue the overall move without making a fresh new lows. All things being equal, it would take a lot of good news to turn this market around, especially considering that the EUR/USD pair is struggling as well, so that should continue to suggest that the Euro itself might be a bit soft.
We did have a massive move higher before the gap lower, so keep in mind that this might be a choppy fight all the way down. That doesn’t mean that we can’t break down, just that it may not be a massive and quick move. This might be more of a multi week trade. However, if we were to break above the ¥120 level, then we probably won’t see massive selling until we get closer to the ¥121 level above which is where massive selling had occurred previously. Finally, the 50% Fibonacci retracement level is in the same neighborhood as well, so that’s another reason why I think this market may break down from here and continue the overall downtrend.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.