The US dollar has bounced significantly during the trading session on Tuesday, bouncing from the JPY109 level. This is an area that we have been going back and forth in, and at this point it’s likely that if we can break above the high of the day on Monday, then we are probably going to go looking higher, reaching toward the gap on the chart from several days ago. That gap coincides quite nicely with the JPY111 level. At this point, that’s my target, but I also recognize that there are a lot of concerns around the world as far as global growth and economic trade is concerned, so that of course will influence where this pair goes.
One of the greatest secondary indicators of this market is what the stock market in America is doing. As a general rule, if they rally and there’s more of a “risk-on” attitude of the market, the pair should continue to strengthen as the Japanese yen is more of a safety currency.
The opposite side of the equation of course is that we break down below the JPY109 level, which would send this market looking towards the JPY108 level below, which has been important more than once. In general, this is a market that will continue to be very noisy but it certainly seems as if the buyers are making a stand, so pay attention to risk appetite globally, it will give you a hint as to where we go next. As far as the JPY108 support level is concerned, we should not break down below there unless there’s some type of horrific negative turn of events in the US/China trade situation or the like. If those start to deteriorate rapidly, that will probably send this market lower. Otherwise, it looks like the buyers are trying to pick things up.
USD/JPY Finding Support At Crucial Levels
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