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The US dollar against the Japanese yen is always a volatile currency. However, lately we have seen this market a bit more sluggish than usual as the stock markets continue to go back and forth. Quite often, it will move in the same general direction as risk appetite, especially with the S&P 500. Remember, the Japanese yen is considered to be a safety currency, and while the US dollar is as well, it’s not as “safe” as the yen.
USD/JPY Video 28.05.19
The market is currently trading just above the ¥109 level, an area that I have laid out as major support. As long as we can see above there, I think that buying dips will continue to work in this market as it is certainly in a medium term uptrend, and looks to be likely to favor the upside eventually. If we can break above the ¥110 level, then the market is free to go much higher.
On the other side of the equation if we were to break down below the ¥109 level ideally close, then I think it opens up the door to the 108, something that would be more of a “risk off” move. Expect choppiness and volatility, but make sure you keep an eye on the stock markets around the world to see how this pair may trade. I would keep it down to short-term trades, because quite frankly it’s going to be very difficult to hang on to trade for any significant amount of time in this choppy market.
Please let us know what you think in the comments below
This article was originally posted on FX Empire