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The US dollar rallied again during Wednesday’s trading session to hit the 50-day EMA. The ¥ 110 level course is one area that will also get some attention, as it sits right above it. That being the case, the market may ultimately see some volatile behavior over the next few days as we have seen a clear area of consolidation over the past few weeks. Ultimately this is a market that I think will have to make a bigger decision and it is also worth noting that the most recent highs have all been at the same level but we have tried to break repeatedly.
USD / JPY Video 08.19.21
I think this represents a market that is struggling between the strength of the US dollar and the potential “risk-waiving” attitude that typically represents when we see a lot of Japanese strength. For this reason, I think we’ll continue to see a lot of back-and-forth in this area, so if you are a range related trader, you will likely find this market to your liking. Ultimately this is a market that I think will respect the 200 day EMA below which is such an important support level for long term trend traders.
On the other hand, if we were to break through the 110.75 level, it would launch another attempt towards the 111.50 above what caused so many sales before. Nonetheless, it looks like a market that is probably tightening more than anything else. That being said, I think the market is likely to continue to be more or less a back and forth in the near term, so intraday charting might be the best way forward.
For an overview of all of today’s economic events, check out our economic calendar.
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