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USD/JPY Price Forecast – the US dollar fails to hang onto gains

By:
Christopher Lewis
Updated: Jul 15, 2019, 16:02 UTC

The US dollar rallied during the trading session on Monday but continues to find a lot of resistance near the ¥108 level. Ultimately, we turned around of form a bit of an inverted hammer, which of course is a negative sign. However, expect more volatility.

USD/JPY daily chart, July 16, 2019

The US dollar rallied initially during the trading session on Monday but has struggled above the ¥180 level to form a less than impressive candlestick. If you see the market break above the top of the range, it’s very likely that he could go looking towards the 100 a ¥0.50 level, possibly even the ¥109 level after that. Alternately, if we were to break down below the ¥107.50 level, that could send this market down to the ¥107 level. In other words, we have a lot of choppiness and is very likely that the market continues to show in decision.

USD/JPY Video 16.07.19

Keep in mind that this pair is highly sensitive to risk appetite, and of course the idea of the Federal Reserve cutting interest rates will weigh upon the greenback as well. Pay attention to the S&P 500, as it is a good proxy for risk appetite and where this pair should go. Quite frankly, the higher that goes, we should see buyers come back into this market. Lots of choppiness should ensue, but one of the most important things you should take away from this article is that your position size should be rather small in this market.

The 50 day EMA is sitting right around the ¥108.50 level, pictured in red. At this point, if we can close above there it’s very likely that the market can continue for a much larger move, but quite frankly there’s nothing on this chart that suggests you should be thrown a lot of money at it.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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