The US dollar has gone back and forth during the trading session on Wednesday in the Asian and European hours, as the Americans are now looking at the ¥109 level as a major barrier. With that in mind, it makes quite a bit of sense that we could see a little bit of a pullback, but if we were to break above the ¥109 level, then the market is likely to go looking towards the ¥111 level after that.
Looking at this candlestick, it shows just how much confusion and choppiness there will be in this pair. Furthermore, the Japanese yen is considered to be a “safety currency”, so it will be interesting to see whether or not risk appetite makes a turn again in the second half of the week as we have seen so often.
USD/JPY Video 04.06.20
There are plenty of reasons that the market could pull back, not the least of which would be riding in the streets the United States. Having said that, the market also has other things to worry about including the coronavirus, and the economic damage that has been done around the world. Given this dynamic, it makes quite a bit of sense that the market will perhaps favor rolling back over and reach into the consolidation area yet again. We break out to the upside though, it is considered to be a “risk on signal”, and therefore we would probably see a lot of other US dollar selling around the world.
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This article was originally posted on FX Empire
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