Tick-tok, 100 here we come
Skerdian Meta • 2 min read
The USD has been suffering some heavy selling pressure overnight. I have been checking all forex websites as well as financial websites, but nothing whatsoever. I thought I might have missed any important forex related event but there has been no data release or other fundamental events. So, I guess this is just the market sentiment. The forex market is very stubborn, there´s nothing stopping it when it makes up its mind.
Most of the major forex pairs have gained about 100 pips against the Buck overnight. The Yen has taken advantage of the USD weakness and just broke below the 100 support level. it jumped back above to 100.15 but has dived again below that strong support level.
This is the case with these enormous long-term support/resistance levels. If they are broken, the expected move (in this occasion down) is likely to be worth hundreds of pips. But, the price might as well just dip below the resistance level temporarily to trigger a few stop losses, only to return back up and then surge hundreds of pips.
The price has to be below 100 in this forex pair when the US closes today in order to be considered a proper breakout.
On the other hand, the BOJ (Bank of Japan) is waiting in the shadows. If they decide to intervene, which will actually be by buying USD/JPY, then that will dump all the technical analysis, fundamental analysis as well as the market sentiment. The BOJ did emphasise that it´s the price action which will force them to take action and not the price itself, but never rule anything out in forex and always be prepared.
This is the second time I write this article because I pressed the wrong button and left the page where I was writing it. So, the price might be a few pips higher or lower than 20 minutes ago, but the logic remains the same.