The USD/JPY pair fell a bit during the day at the open on Friday, but then bounced again, only to find sellers again. The market looks as if it is going to test the 110.50 level, which is a significant support level. I believe that ultimately, we will find buyers underneath, especially if we get closer to the 110 level. I think that we will continue to see a lot of range bound trading, as we creep into the month of August. Remember, August is one of the least liquid months of the year, as most large traders are away at holiday.
Back and forth
I think this is simply a market that will go back and forth on short time frames. Range bound trading systems are probably best used in this environment, with such indicators such as Stochastics being favored. Ultimately, this is a market that I think will continue to find itself overbought and oversold occasionally, and then correcting. I don’t see any real direction in the market at the moment, and therefore it’s difficult to put any real money to work at this point. I expect that if you get gains from either a situation where we are overextended or perhaps oversold, you are best served taken advantage of that profit. I will keep you up-to-date as to what I’m doing here at FX Empire, but right now I expect very little out of this market, with maybe a slight downward bias.
Written by FX Empire