USD/JPY Price Forecast – US Dollar Bursts Higher In Risk On Environment

The US dollar has rallied significantly against the Japanese yen during trading on Wednesday, reaching towards the ¥110 level, an area that has been a significant barrier as of late. The explosive move higher was exacerbated by the ADP numbers coming out much better than anticipated, signaling that perhaps the Non-Farm payroll number could come out better than anticipated as well. The United States continues to lead the world in economic growth, so it does make sense that it would continue to see more money flowing into it.

USD/JPY Video 06.02.20

With stock markets rally in, the longer-term correlation of the S&P 500 and the USD/JPY pair moving in the same direction has come back into play. If we can break above the ¥110 level, then the market is likely to go towards the ¥111 level, perhaps even the ¥112.33 level which was the scene of a significant breakdown. At this point, short-term pullbacks will probably not be buying opportunities, but the reality is that we are in a longer term uptrend channel anyway, so a lot of buyers will have already been looking for this most recent play. Selling isn’t something that I would be looking to do, even if we do get a pull back, it will only be a matter of time before the buyers return and take advantage of what has been a very reliable uptrend over the longer term. Granted, it’s been very noisy, but that seems to be the nature of markets these days in general, not just this pair.

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