USD/JPY Price Forecast – US Dollar Breaks Through Support

The US dollar has broken down a bit against the Japanese yen during trading on Thursday, as we continue to see the longer-term pattern of US dollar selling against the Japanese yen play itself out. After all, we have been grinding lower for some time and it does make quite a bit of sense that we would try to reach towards the most recent bounce from the lows, near the ¥102 level. Now that we have broken below the ¥104 level, the recent descending triangle measures for a move down towards the ¥102 level as well, so it all kind of ties itself together nicely.

USD/JPY Video 06.11.20

With all that being said, it looks like we will continue to see a lot of negativity in this market overall, which makes quite a bit of sense considering that we had been in a downtrend before a lot of this nonsense had started with the elections. With this being the case, it is a simple continuation of what has been, as the US dollar continues to see sellers. Furthermore, it is a bit of a “safety bid” into the Japanese yen which also makes a lot of sense considering that closing down multiple economies around the world will almost certainly have a negative effect on growth in general.

Because of this, I still believe that fading short-term rallies will be the best way to play this market, as long-term trend traders certainly have been going. I do not necessarily think we go straight down to the bottom, but we certainly look as if we are heading there.

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