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The US dollar has pulled back a bit against the Japanese yen initially during the trading session on Monday but has found a bit of buying at the 50 day EMA. That’s a technically significant event, and if we can stay above there, then the market could go towards the 200 day EMA. That coincides nicely with the major breakdown candle stick that sent the market down towards the ¥105 level.
USD/JPY Video 24.09.19
Keep in mind that this pair is highly sensitive to risk appetite and therefore you should be paying attention to stock markets and of course other risk assets around the world. The S&P 500 is my favorite secondary indicator for this pair, so how it behaves typically this pair will behave as well as the Japanese yen is such a safety currency for traders.
Looking at the chart, I believe that we probably continue to drift a little bit lower longer term, but a short-term bounce certainly can’t be ruled out as it’s quite common to see the market bounce around between the 50 day EMA and the 200 day EMA. Ultimately, this is a market that will probably chop around as we try to figure out where were going next, not only with the US/China trade situation, but global growth in general. Market participants continue to show signs of confusion, and that of course will show itself in this market as well. With this, the market is likely to bounce around between the two moving averages in the short term. Longer-term, I still anticipate that it’s likely we could go down to the ¥170 level.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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