The US dollar has pulled back a bit against the Japanese yen during the week, closing out Friday on the back foot. At this point though, it’s very likely that we continue to see a lackluster performance as this pair tends to be similar to the S&P 500. What I mean by this is that typically if the S&P 500 rallies, this pair will as well due to risk appetite. As we currently see the S&P 500 struggling just above the 2900 level, it looks eerily similar to the ¥112 level in this pair. At this point in time the two tend to move in the same direction, so there’s no need to fight the correlation.
USD/JPY Video 22.04.19
On a pullback I believe that there is plenty of support at the ¥111.50 level, and that of course the moving averages at lower levels including the ¥111 level. To the upside, if we can break above the ¥112.25 level on a daily close, then I think will go looking towards the ¥113.50 level. In general, this is a market that should continue to go higher in my estimation, but if we were to break down below the moving averages that I have on the chart, then obviously we could drop down to find even more support at the ¥110 level. Looking at this chart, if we were to break down below the ¥110 level, then the ¥109 level and finally the ¥180 level would both be targeted.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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