The yen has managed to rally against the dollar for most of 2016, but is this rally running out of steam around the psychologically important 100 level? According to the charts, the most likely outcome is another test of 100 and then a possible break.
Although the daily chart gives a clearer bearish picture, here the 4-hourly chart is examined for shorter-timeframe trades. A test of 100 (100.06) both on September 22nd and September 27th showed the level holding and led to the US dollar rallying as far as 101.75-101.80. This was also the top of the cloud and the dollar was unable to exit the cloud on the upside. The top of the cloud at 101.75 could be a resistance level then. Subsequent dollar selling has led to the pair falling below the cloud to 100.80. Tenkan-sen is still above the Kijun-sen line however and for a confirmation of the bearish bias, Tenkan-sen (red line) has to drop below Kijun-sen (blue line). Present price action is below both lines right now, which is bearish in itself.
A very key area for dollar/yen then is the 99-100 level. Dollar/yen has not traded below the 99 level since 2013. Following Brexit, the pair tested the 99 level but quickly rebounded above 100. Levels that should be watched are 100, 99.60 (2-month low) and of course around 99 (post-Brexit and 3-year low).
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.