USD/JPY Price Forecast – US dollar continues to chop against yen

The US dollar has chop around against the Japanese yen during trading on Tuesday. We initially reach the 100 level ¥0.50 level before pulling back, although there is plenty of support underneath. Overall, this is a market that should continue to be very volatile, because it is highly sensitive to the trade relations between the United States and China. In general, I think that the market will eventually focus on fundamentals, but we are clearly not ready to do so quite yet. The interest rate differential between the currency should continue to favor the US dollar, but overall the market has a lot of fear built into it as well, and that favor the Japanese yen.

The ¥111 level underneath should continue to be rather supportive, but I think at this point it’s difficult to imagine a scenario in which it’s going to be comfortable to buy this market or sell it for any length of time. I think this is a short-term traders market at best, and you should continue to look at it as a scalper’s type of situation, not some type of investment quite yet. We would need to see the global markets calm down overall in order for this pair to continue to rally. The attitude of this market will be depended on headlines and therefore make it almost impossible to trade for any length of time as panic bots ply their trades due to headlines.

USD/JPY Video 05.09.18