During trading early on Tuesday, the US dollar has rallied significantly against the Japanese yen in more of a “risk off” type of move. We had seen a lot of support below at the ¥108.50 area, and now it looks as if that support has held. The upward grind it should continue in this pair as we have seen more than once that traders are more than willing to jump in and take advantage of the upward momentum. Because of this, buying on the dips should continue to work as we chop higher and higher.
It’s going to be about the US/China trade situation as you would expect, due to the fact that the December 15 headline is coming soon, they market would jump all over a “risk on move” if we see some type of delay on those tariffs or better yet, some type of “phase 1 deal.” At this point, the market has been grinding higher in somewhat of an uptrend and channel, and this simply looks as if it’s going to be more of the same. Ultimately, the ¥110 level above continues to be massive resistance, but if that level gets broken to the upside it’s very likely that the market will simply shoot straight up in the air as it has been held down for some time. The ¥111 level would be a gap that needs to be filled, and then eventually the ¥112.50 level then gets targeted. To the downside, if we were to break down below the ¥108 level, it’s likely that the market could break down significantly. At this point though, I don’t anticipate a major breakdown and it’s very likely that we will continue to just simply grind it to the upside and go looking towards that resistance yet again. That being said, the market looks to be building up enough pressure to finally break through.
It’s going to be about the US/China trade situation as you would expect, due to the fact that the December 15 headline is coming soon, they market would jump all over a “risk on move” if we see some type of delay on those tariffs or better yet, some type of “phase 1 deal.” At this point, the market has been grinding higher in somewhat of an uptrend and channel, and this simply looks as if it’s going to be more of the same. Ultimately, the ¥110 level above continues to be massive resistance, but if that level gets broken to the upside it’s very likely that the market will simply shoot straight up in the air as it has been held down for some time. The ¥111 level would be a gap that needs to be filled, and then eventually the ¥112.50 level then gets targeted. To the downside, if we were to break down below the ¥108 level, it’s likely that the market could break down significantly. At this point though, I don’t anticipate a major breakdown and it’s very likely that we will continue to just simply grind it to the upside and go looking towards that resistance yet again. That being said, the market looks to be building up enough pressure to finally break through.