The US dollar has rallied a bit against the Japanese yen during the early hours on Tuesday. It looks as if the market is finding the area above the ¥110 level agreeable again, and of course there is a major gap that we need to pay attention to as well, as Forex markets do tend to fill those gaps eventually. Now that we are rallying rather significantly, it looks like we are finally going to make that move.
The ¥111 level is important due to the fact that it is not only the scene of that gap lower, but it is also the scene of the 200 day EMA. I think at this point that’s what we are aiming for, and that short-term pullbacks should be thought of as buying opportunities. This will probably be more of a grind higher more than anything else, so there’s no need to be reckless, but just simply accept what the market is going to offer.
Keep in mind that this pair does tend to act somewhat sensitively to the global markets, and what they are doing. If we start to get a lot of negative news out there and see the S&P 500 melt down, then this market will probably pull back. That being the case it’s very likely that what we will see is an attempt to reestablish the ¥110 level. That being said, gaps almost always get filled and therefore I still remain constructive in this market but I also recognize that it’s not necessarily going to be the easiest move to make. The next question of course would be whether or not we can break above the ¥111.15 level which is where the gap occurred. That’s an entirely different scenario, but if we do there is significant resistance just above at the ¥111.50 level that extends all the way to the ¥112 level.
Expect a slow grind, but it certainly looks as if the buyers are starting to try and run this pair a bit higher. To the downside, it would be very difficult to short this market until we break down below the ¥109 level. At that point the 100 a in level would more than likely be targeted.
The ¥111 level is important due to the fact that it is not only the scene of that gap lower, but it is also the scene of the 200 day EMA. I think at this point that’s what we are aiming for, and that short-term pullbacks should be thought of as buying opportunities. This will probably be more of a grind higher more than anything else, so there’s no need to be reckless, but just simply accept what the market is going to offer.
Keep in mind that this pair does tend to act somewhat sensitively to the global markets, and what they are doing. If we start to get a lot of negative news out there and see the S&P 500 melt down, then this market will probably pull back. That being the case it’s very likely that what we will see is an attempt to reestablish the ¥110 level. That being said, gaps almost always get filled and therefore I still remain constructive in this market but I also recognize that it’s not necessarily going to be the easiest move to make. The next question of course would be whether or not we can break above the ¥111.15 level which is where the gap occurred. That’s an entirely different scenario, but if we do there is significant resistance just above at the ¥111.50 level that extends all the way to the ¥112 level.
Expect a slow grind, but it certainly looks as if the buyers are starting to try and run this pair a bit higher. To the downside, it would be very difficult to short this market until we break down below the ¥109 level. At that point the 100 a in level would more than likely be targeted.
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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.