USD/JPY Price Forecast – US dollar bounces slightlyThe US dollar bounced slightly during the trading session on Wednesday, as we may have gotten a bit oversold. However, there is a lot of negative headlines out there that could push this market lower, and I believe that will be what happens eventually.
The US dollar bounced slightly during the trading session against the Japanese yen, showing signs of life again but the market had been oversold more than anything else. I believe that there is a lot of resistance at the 100 level ¥0.50 level that extends to the ¥112 level. Ultimately, this is a market that I think will go down to the ¥110 level, possibly even the ¥108 level, based upon longer-term charts. I believe fading rallies continues to work, and I think that the 200 day EMA being broken so decisively to the downside should now start to offer quite a bit of resistance.
USD/JPY Video 27.12.18
This is a market that I think continues to see a lot of volatility, but quite frankly most of the pundits on Wall Street expect this market to fall based upon Japanese yen strength. Ultimately, I think that the massive resistance that we have seen at the ¥114.50 level will continue to be one of the main drivers of where this market goes. Beyond all of that, we have also broken through a major uptrend line, so that of course is a negative sign as well.
What I think will further drive this pair lower is the fact that the Federal Reserve has softened its stance a bit, so that could put a bit of uncertainty into the US dollar overall. Remember, when there’s a lot of uncertainty out there, this pair tends to fall right along with interest rates in the ten year note.