the US dollar initially attempted to rally during Friday’s trading session, but then turned around to the ¥ 111 level. By pulling back as we did, the market stays in the channel, as the market has seen the overall channel hold for a while. All other things being equal, that means we could roll back to the ¥ 110 level, maybe even the ¥ 109.75 level. Also, we might have been able to do a bit of a ‘double top’, as the ¥ 111 level was resistive before. Additionally, we also have the MACD showing signs of divergence, so at this point we might see a little more negative attention.
USD / JPY Video 06.28.21
However, the 50 day EMA is also trending towards the uptrend line which is part of the channel. However, if we were to fall below the 50-day EMA, it is very likely that we could turn to the ¥ 108 level. The ¥ 108 level is also supported by the 200-day EMA, so it’s very likely that we see support there. A fall below this level would be massively negative and could tip this market a bit. I don’t expect that to happen, but it is very likely that we would see a lot of overall risk built into the market if it actually happened. That being said, I think we have a slight pullback ahead, and frankly it makes sense from a historical perspective, but ultimately I would be very careful to buy here.
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This item was originally posted on FX Empire