The US dollar has rallied again against the Japanese yen but given back some of the gains as we see a lot of noise when it comes to this pair. I believe that the pair probably continues to see a lot of choppiness right around the 50 day EMA and it looks as if we are trying to form some type of short-term bottoming pattern. However, it should be noted that the 200 day EMA is starting to reach lower as well, and the fact that we could not hang on to those gains over the previous two candles tells me that at the very least there is a serious fight ahead.
USD/JPY Video 22.05.20
All things being equal, the ¥108 level is a major barrier that we need to pay attention to, just as the ¥107 level underneath offer support. If we break down below the ¥107 level, then it is likely that we continue to drift towards the 160 level. All one has to do is look at the last several weeks to see that this pair has been extraordinarily choppy, and it really does not know where to go next. Yes, I think there is more downward pressure than up, but not exceedingly so. Because of this, expect a lot of choppy behavior on short-term charts, and quite frankly it is probably short-term trading that most people will be doing when looking at this pair. Eventually, we may get some type of significant move, but I just do not see it quite yet.
This article was originally posted on FX Empire
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