Chart of the Day: Spot USD/JPY (24/09/2020) | alb.com
The Dollar index rallied yesterday by 0.39% and is up for the week by 1.54%. Conversely, the S&P500 declined by 2.13% yesterday and Gold declined by 1.96%. The Dollar Index appears to have broken out of the range, closing yesterday at 94.34,above the swing high made on 03/08/2020 at 93.97. The basing formation and the two wave pattern of higher highs and higher lows suggests the start of a bullish trend. The next area of resistance is around 94.50 which is only 0.13 cents away from current price. The 200 EMA on the daily time frame is at 96.14 which implies that there is significant move to the upside. However, it is highly likely that we will see pullbacks in the process particularly as the 9, 20 and 50 daily EMA are below price and should act as dynamic support. The USD/JPY is in a short term down trend. The 105.50 level was an area where price bounced off whilst trading in the range from 06/08/2020 until the eventual break and close on the 15/09/2020 at 105.42 which was confirmed in the following session as price moved significantly lower, with a low made on 21/09/2020 at 103.99. With price having pulled back to the 105.50 level yesterday and unable to close above it, I am anticipating that this area is now acting as resistance and it’s on that basis that I am anticipating a short term decline. However, the key would be to see short term weakness in the Dollar Index but with the concerns of a global economic recovery, investors may look to the U.S. Dollar and other safe haven assets during this period of uncertainty.
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