USD/JPY Weekly Price Forecast – USD Finding Support for Potential Trend Change

The US dollar has initially fallen against the Japanese yen to break well below the ¥105 level, but then turned around to recapture it. Ultimately, if we can break above the top of this weekly candlestick it is very likely that we will continue to go higher because we will have not only broken above the 50 week EMA, looking to go towards the ¥108 level. If we can break above the 200 week EMA up there, then the market is ready to go much higher.

USD/JPY Video 15.02.21

To the downside, if we were to break down below the ¥104 level, then it is likely that we could fall apart, but pay attention to the interest rate differential between the two economies, because that can make a move in the currencies. Ultimately, this is a market that could be in the process of doing something rather large, but you need to be cautious and take your time before putting money into the market as these moves tend to be very noisy. All things being equal, this is a market that I think is going to be one worth watching, and therefore if you set your parameters you can put together some type of larger trade.

In the meantime, it is going to be noisy so short-term traders will probably do a little bit better in this scenario. In general, I think that it is worth paying attention to the latest attitude of the markets, and of course the 10 year note in America, while the 10 year JGB should be watched in Japan for divergence of interest rate spread.

For a look at all of today’s economic events, check out our economic calendar.