USD/JPY Price Forecast – US Dollar Breaks Major Figure

Forex traders seem to be content in assuming that there is going to be stimulus coming out of the United States. This is showing up in the USD/JPY pair during the trading session on Wednesday, as we have seen the market break below the ¥105 level rather early in the day. That being said, the market looks as if it is ready to continue drifting towards the lows, something that I have been talking about for a while. However, I was a bit surprised to see the market break through there as quickly as it did.

USD/JPY Video 22.10.20

To the downside, I believe that the ¥104 level is probably the next target, as it has caused a bounce the last couple of times we have been down there. Breaking through their opens up the possibility of a move down to the ¥102 level, which was an even more important support level in the past. That being said, I would not expect to move much lower than that before the Bank of Japan will start to take action.

They are one of the most active central banks out there with perhaps the exception of the Swiss National Bank when it comes to trying to keep their currency relatively cheap. However, as the Federal Reserve has such a loose monetary policy and there is the possibility of massive stimulus coming out of Washington DC, that will put downward pressure on the greenback overall, probably even more so than even the Bank of Japan can handle. We clearly are in a downtrend and that continues.

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