USD/JPY Price Forecast – US dollar back to 107The US dollar has initially gapped lower against the Japanese yen only to turn around during early trading on Monday to reach towards the ¥107 level again. This is an area that has been both support and resistance recently, so it looks as if we are at a short-term inflection point.
The US dollar has gapped lower during the trading session on Monday, but then turned around to fill that gap to reach towards the ¥107 level. By doing so, the market looks as if it is going to try to break to the upside and perhaps even the 50 day EMA again. However, this is an area that has been both support and resistance so don’t be surprised at all to see more of a fight. In fact, I think it’s a 50 pip range that we are essentially trading in between the ¥107 level and the ¥106.50 level that is going to determine what happens next. If we can break to the upside, then we will probably test the ¥108.50 level. However, if we were to break down below the ¥106.50 level, then the market probably goes looking towards the ¥105 level.
USD/JPY Video 08.10.19
Obviously, this pair is very risk sensitive and with the US/China trade relations in focus right now, it’s very likely that the market will be volatile as headlines and leaks of meetings will show up in the news. Ultimately, this is a market that could jump back and forth over the next couple of days, but by the end of the week we may have a bit more clarity as we will have both the junior and senior meetings during the week in Washington DC. In the short term though, keep your position size small as you won’t want to be caught on the wrong side.
Please let us know what you think in the comments below