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The US dollar has rallied a bit during the trading session on Monday, as we are getting a bit of a relief rally from when I see. I think that the 107.50 level above will be resistance though, as it was previously significant support. That supports should offer a bit of “market memory”, showing that there should be plenty of orders in that area. I think that and exhaustive move or exhaustive candle in that area is an excellent selling opportunity, but I also believe that there will be a lot of noise. Since we broke down that barrier, I think that the 105 level is a reasonable target.
Alternately, if we break above the 107.50 level, then we reenter the previous consolidation area, perhaps reaching towards the 109 level, and then possibly the 110 level. This would need to coincide with a “risk on” move in the stock markets and other areas such as commodity markets. If we can break above the 110 level, then we should go much higher. However, right now I believe that the US dollar is in trouble, so I think that we should continue to see bearish pressure overall. However, you need to keep an open mind going forward, because this pair does tend to turn around quite rapidly. I think the one thing you can probably count on is a lot of volatility and nausea if you over lever yourself.
USD/JPY Video 20.02.18
This article was originally posted on FX Empire