USD/JPY Price Forecast – US Dollar Bounces a Critical Juncture
The US dollar has initially tested the ¥107 level during the trading session on Wednesday, only to turn around and bounce again. This looks like we are trying to stay within the ¥107 to ¥109 region, which has been the range over the last two weeks or so. At this point in time, we are simply grinding back and forth in this 200 point range, but it is worth noting that there are clear levels beyond that area that we should be paying attention to as well. Looking at the chart, I can make a strong argument for the ¥111 level being resistance as well, so a breakout above the ¥109 level will probably go looking towards that handle.
USD/JPY Video 16.04.20
On the other hand, if the market was to break down below the ¥107 level, then it opens up a move down to the ¥105 level. Essentially you have 200 point intervals that you should be paying attention to in this pair. However, you should keep in mind that this is probably been driven by the US dollar more than anything else right now, as the Federal Reserve is flooding the market with currency. During this session on Wednesday, we had seen a general run towards the US dollar, so it’s not a huge surprise to see how this has behaved. When you look at the larger picture, it certainly looks as if we are trying to crush volatility which would be a good thing considering that the swings have been so wild as of late.