The US dollar has rallied significantly during the trading session on Tuesday, breaking above the 50 day EMA in a show of significant strength, as we see US dollar strength across-the-board. This is interesting, because typically this is a “risk on” type of move but it also can be influenced by US dollar strength in general. By doing so, the market looks highly likely to see a lot of noise in this area, but the dollar could in theory be forming a bit of an inverted head and shoulders, albeit a very messy one. In other words, expect more slop from this trade. If we break above the ¥108 level, then we have to deal with the 200 day EMA and the ¥109 level. Quite frankly, I would love to see the market get up to the ¥109 level so I can start selling again.
USD/JPY Video 20.05.20
It is not that you cannot buy it here, it is just that you need to be aware the fact that there is a lot of noise just waiting to happen, and therefore one would have to think that the short-term trader might be attracted to this pair, but quite frankly it is a bit too noisy for me over the last couple of months. The Japanese yen is forming a massive triangle on ultra-longer-term charts, so it is something to watch but we are a far distance for making a break in either direction at this point. Someday, this will be THE pair to trade. Right now, that is just not it as it is more than likely going to be an excellent place to get chopped up unless you are trading something akin to five minute charts.
This article was originally posted on FX Empire