USD/JPY Price Forecast – Lack of liquidity pushes markets around

This is a market that has been all over the place during the first day of the week. All things being equal, this is a risk barometer, so it does make quite a bit of sense that we were all over the place as we had initially reacted to the addition of tariffs by Donald Trump against the Chinese, but then got wind of the possibility that the Chinese were looking to talk. That has not been confirmed, so quite frankly the markets don’t know what to do.

USD/JPY Video 27.08.19

This is the last week of summer and traditionally a vacation week for most large traders, so there is going to be a lack of liquidity. With all of the noise and nonsense going on around the world right now, it’s difficult that anybody is overly convicted on any particular position. This may be what you are seeing on the chart right now, a simple lack of conviction. There’s also the possibility that perhaps the Bank of Japan had something to do with defending the ¥105 level, although there are no reports of that.

At this point it looks as if were trying to get back into the previous consolidation area with ¥107 above being resistance, and of course the ¥105 level underneath being support. Ultimately, I don’t know what’s changed in this pair of the last 24 hours beyond the lack of liquidity.

Please let us know what you think in the comments below