In the event of a decline, breaking below the aforementioned moving averages, there is still support from the uptrend line originating from the ascending triangle.
- The USD/JPY showcased a back-and-forth movement during Thursday’s trading session as market participants continue to search for a solid footing.
- Notably, the 50-Day and 200-Day Exponential Moving Average (EMA) indicators are positioned just below the current price, providing a degree of technical support.
- The focus appears to be on chipping away at the ¥135 level, a significant psychological barrier that has recently garnered attention in the market.
- A breakthrough above this level could potentially pave the way for the US dollar to advance toward the ¥138 level, which marks the upper boundary of the ascending triangle pattern.
The yen is a popular asset during turbulent times.
In the event of a decline, breaking below the aforementioned moving averages, there is still support from the uptrend line originating from the ascending triangle. Consequently, there is a level of support in that general area. Currently, it seems likely that we will continue trading within this pattern, but short-term movements may be characterized by choppiness and indecisiveness. This is understandable as uncertainties persist regarding the state of the economy, prompting market participants to closely monitor the latest announcements and data releases.
It is anticipated that the market may largely tread water and seek clarity between now and the end of the week. Breaking above the ¥138 level would represent a significant triumph for the US dollar, potentially sustaining the longer-term uptrend. This breakthrough could also trigger a swift move towards the ¥140 level. However, for this to materialize in the near future, there needs to be a notable injection of momentum into the market. Presently, the available momentum does not appear sufficient to facilitate such a move. Nonetheless, given the various factors underlying the market, I do not find it prudent to engage in short positions. There are several reasons supporting the possibility of a bounce or at least stabilization in the market.
Ultimately, the US dollar experienced a back-and-forth trading session on Thursday as traders sought a solid footing. The 50-Day and 200-Day EMAs provide technical support, while attention is focused on breaking above the ¥135 level. Short-term movements may be characterized by choppiness and indecision, reflecting uncertainties surrounding the economy. It is anticipated that the market will seek clarity in the near term, with a breakthrough above the ¥138 level potentially fueling a continuation of the longer-term uptrend. However, the current momentum does not seem sufficient to trigger such a move easily. Given the underlying factors, shorting the market is not advisable, as there are several reasons indicating the potential for a bounce or stabilization.
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