USD/JPY Weekly Price Forecast – US Dollar Continues Parabolic move

The US dollar has broken above the 200 week EMA, and of course the ¥108 level. That being said, the market is likely to need to pull back a bit, due to the fact that we have gotten a bit parabolic. When you look at the chart though, the most obvious thing that you should see is the fact that we have broken to the upside and change the overall trend, or at least are trying to. At this point in time, I think a lot of this comes down to the interest rate differential between the United States and Japan, which is quite often the main driver of this market. This is especially true with the 10 year note in the United States and the 10 year JGB market.

USD/JPY Video 08.03.21

The size of the candlestick is rather impressive, but that does not mean that we cannot pull back rather drastically as well. After all, sooner or later gravity comes back into play, perhaps sending the market back down to the ¥107 level, maybe even the ¥106 level. I do think that this is a market that you cannot sell, and it is likely to see the market goes looking towards the ¥110 level. Quite frankly, even if I knew for a fact that the market was going to pull back from here, I would simply sit on my hands in order to start buying again, so a little bit of patience may go long way in this market. You simply cannot chase it all the way appear, because it is a great way to lose money as chasing the trade puts your risk to reward ratio so out of whack.

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