Yen Crushed; USDJPY Trades Above 109.00

Yen Crushed; USDJPY Trades Above 109.00

Key Highlights

• US dollar breaks an important resistance against the Japanese yen to trade above the 109.00 level and challenge the 109.50 area.
• Japanese yen weakened across the board with the GBPJPY pair the biggest gainer, as the British pound was also seen trading higher on optimism of a NO vote.
• EURUSD failed to overtake the 1.2920-30 level as the 100 hourly simple moving average acted as a barrier for the Euro buyers.
• GBPUSD surging higher and traded above the 1.6500 level during the Asian session, as there was big no from Clackmannanshire, according to the official results.

USDJPY

There was no stopping the US dollar buyers against the Japanese yen, as the USDJPY surged higher during the Asian session. There was an important ascending channel on the 4 hour chart of the USDJPY pair, which was breached recently. The stated channel acted as a support after the break and finally ignited a rally in the pair. As of writing the pair traded as high as 109.41. If it corrects from the current levels, then a move closer to the 23.6 % Fibonacci retracement level is possible in the short term. The most important point to note is that the mentioned fib level is coinciding with the same broken trend line. So, the US dollar buyers might protect the downside around the 108.78-68 area.

Intraday Support Level – 109.00

Intraday Resistance Level – 109.41

• Overall, the bias remains bullish, but it would not be wise to chase the pair around the current levels.
• A small pullback is very likely in the coming sessions, which can be seen as a buying opportunity.

If the pair continues to surge higher, then a retest of the 109.41 high might be on the cards. In that situation, there is even a chance of the pair testing the 109.50-60 resistance zone.

EURUSD

The Euro is very choppy against the US dollar, as it fell below the 1.2850 level yesterday, but managed to climb back higher above the 1.2900 area. However, the 100 hourly simple moving average acted as a hurdle for the pair and stopped more upside. There is a bullish trend line forming on the hourly chart of the EURUSD pair, which might act as a catalyst for the pair moving ahead. Currently, the pair is trading around the 23.6% fib retracement level of the last leg from the 1.2831 low to 1.2925 high, which also coincides with the mentioned trend line.

Intraday Support Level – 1.2878

Intraday Resistance Level – 1.2925

• Staying on the sidelines would be a wise decision unless the pair breaks higher or lower in the near term.
• A break below the intraday support level could lead more losses in the pair and might take it towards the last low.

The highlighted trend line holds the key, as a break below the same might give a reason to the Euro sellers to take the EURUSD pair lower. A test of the 1.2800 level is possible in that scenario if sellers gain control.

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