USD/JPY Price Forecast – US Dollar Breaks Down
The US dollar initially tried to rally during the trading session on Tuesday but then gave back the gains to slice through the ¥109 level. At this point, the 50 day EMA underneath is most likely going to offer support.
The US dollar initially tried to rally during the trading session on Tuesday but then gave back the gains to slice through ¥109 level. This is a market that continues to be very noisy, but at the moment it looks as if there is plenty of support underneath, so I think this is simply going to be a bit of a buying opportunity. After all, the Japanese yen is getting hammered against almost everything over the longer term, and with that being the case I am looking for signs of support and perhaps long wicks to the downside that tell me it is time to get long again.
USD/JPY Video 19.05.21
When you look at the longer-term charts, you can see that we had bounced from the 38.2% Fibonacci retracement level, which sits just below the ¥108 level. With this being the case, the market has then recovered, and it simply has been chopping and what could be thought of as a “ascending channel.” All things being equal, it is not until we break down below the hammer that was the swing low that I would consider shorting. If that is the case, then we probably have a run into the Japanese yen for some type of safety trade as the Japanese yen tends to be thought of as the “risk off currency” for a lot of traders out there.
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One of the main drivers at this point seems to be interest rates, and the fact that we are seen a major divergence between the bond yields of both countries. As long as it continues to spread in favor the United States, that should drive this pair higher.
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