Hey guys! Who’s looking for the dollar to extend its gains against the yen? If you are, then you’d definitely want to see this setup.
A couple of weeks ago we talked about how USD/JPY was at a “perfect” support level. As it turned out, the dollar did extend its uptrend against the yen. Too bad I missed the move!
Are we looking at another chance to buy the dollar here? USD/JPY is hitting the 100 SMA support that also happens to line up with last week’s low.
Thing is, the dollar might not be finished retracing just yet.
Thanks to a combo of a “patient” Fed, mixed U.S. economic data, and a bit of uncertainty over what kind of trade deal Trump and his team are making with the Chinese, the dollar doesn’t have a lot of bullish catalysts to support another move higher.
That doesn’t mean that the uptrend is dead, though. Aside from the possibility of the U.S.-China trade war ending in a couple of weeks, Bank of Japan (BOJ) Kuroda’s recent dovish statements are also making it difficult for USD/JPY to sustain a bearish momentum.
How low do you think USD/JPY can go before it sees new bullish pressure? Its current levels look good enough if you really want to get in on the uptrend, but I’m also looking at the 110.00 handle near the 200 SMA and the mid-channel line for potential entry.
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