USD/JPY Price Forecast – US dollar continues consolidation against Japanese yen

The US dollar has pulled back a bit during the trading session on Thursday, but then rallied a bit to show signs of life again. Remember, this pair does tend to follow risk appetite and with the S&P 500 gapping higher overnight, it makes sense that this pair also rally. However, there is a massive amount of resistance out the ¥107 level, as we have seen over the last several weeks. Beyond that, the 50 day EMA is testing that area, so it’s very likely that we continue to see sellers jump in. With that being the case, it’s very likely that the sellers will come in and keep this market within the consolidation area that we had been in. In fact, I’m not a buyer until we get a daily close well above the 50 day EMA.

USD/JPY Video 30.08.19

As we head into the holiday weekend in America, we will see a lack of volume, so at this point it’s likely that we will go back and forth and stay within this consolidation area. There are far too many risks out there to keep traders coming in and selling the Japanese yen. While the Chinese overnight did suggest that they weren’t going to retaliate, the reality is that there are a ton of reasons to believe that the Japanese yen will continue to attract order flow as not only do we have the US/China problems but we also have global growth slowing down.

Please let us know what you think in the comments below