USD/JPY Price Forecast – US dollar continues to be resilient

The US dollar initially fell during trading on Tuesday but has found buying pressure underneath in continuation of the bullish candle that had formed on Monday.
Christopher Lewis
USD/JPY daily chart, December 12, 2018

The US dollar initially pulled back during the trading session on Tuesday but turned around of form a bit of a hammer like candle early in the day. It looks as if we are going to go looking towards the ¥114 level again, as it is a major round number that has offered quite a bit of resistance. Between there and the ¥115 level, I think there is a lot of noise that will be difficult to choose through. However, when you look to the downside you can see a major uptrend line on the chart that is supported by the 200 day exponential moving average underneath there.

USD/JPY Video 12.12.18

The ¥112 level underneath continues to be massive support. I think if we were to break down below all of those levels then we could see some type of a massive move to the downside, perhaps down to the ¥100 level, possibly even the ¥108 level after that. I do believe that in general the US dollar will continue to do fairly well as we are expecting another interest rate hike, but Jerome Powell has made things a bit less clear due to the fact that he suddenly sounded a bit less bullish during the last comments he put out into the news. With that, I think it sows the seeds of confusion, and that’s what we are seeing on the chart. As we close out the year, liquidity will be an issue and it’s likely that towards the end of the year things will get rather erratic. However, I think that at this point you have to go with the trend. Short-term pullbacks should offer opportunities.

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