The US dollar initially pulled back a bit during the trading session on Monday but turned around to form a supportive looking candle for the day. The market is just below the ¥110 level, an area that I have highlighted on the chart. The 50 day EMA is just above and coming into the picture. I believe that we will see a turnaround rather soon, so I’m looking for some type of exhaustive candle to start shorting. Once we get that, then I think we will continue the downtrend overall. However, if we can break above the 50 day EMA, then the market will probably go looking towards the 200 day EMA, pictured in black on the chart.
USD/JPY Video 22.01.19
Looking at this chart, this has been an excellent rally, but we are also going to be looking at the 61.8% Fibonacci retracement level, so I think that there are too many reasons to think that the market is going to slow down. This will also be heavily influenced by market attitude overall, so if the stock markets start rolling over and showing signs of weakness, that will probably be reason enough to think that this market falls as well. I believe that the Japanese yen will continue to strengthen into the year, but if we do clear the 200 day EMA, then the ¥112 level will be your next battlefield, but still is below the trend line that we had broken to the downside.
This article was originally posted on FX Empire
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