USD/JPY Price Forecast – US Dollar Breaks Down Again

The US dollar has broken down a bit during the trading session on Friday, as we continue to see a lot of US dollar weakness in general. The Japanese yen of course has been used for safety as the stock markets have taken a bashing, and now that it looks like we have another round of troubles coming our way. At this point, I think a lot of this comes down to people being concerned about the Federal Reserve cutting rates the way they have, because then they start to ask questions about whether or not the Federal Reserve know something that they don’t. Ultimately, a bounce from here should be looked at as a potential selling opportunity, but probably not until we get back towards the ¥107 level. Quite frankly, this is oversold, and you should be chasing the trade down here.

USD/JPY Video 09.03.20

If we were to break down below the ¥105 level, then we go to the 102 level given enough time, but we have fallen far too quickly to think that we are simply going to melt down from here. That being said, you can’t chase the trade as sudden and massive reversals are possible. If the market was to turn around a break above the ¥107.50 level, then it’s possible that the market could have further to rally but I think at this point at the very best you can hope for is some type of basing pattern as we are at the bottom of the larger consolidation region.