USD/JPY Price Forecast – US Dollar Continues to Consolidate

The US dollar initially spiked at the open on Friday but found the same resistance that it did during the previous session on Thursday. It pulled back to show signs of a bit of calming, which quite frankly I think the Forex markets are exhausted, so this is not a huge surprise. Looking at the chart of the last couple of months this pair has been all over the place due to the fact that the economic situation has been doing the same thing. With most of the economy locked down right now, it’s a bit much to expect that this pair will suddenly take off to the upside for massive moves. However, this is a market that isn’t necessarily ready to break to the downside, at least not significantly as the US dollar is in such high demand.

USD/JPY Video 20.04.20

To the downside, the ¥107 level should offer a bit of support, but breaking down below there it opens up a move to the ¥105 level pretty quickly. On the other hand, if we turn around and rally, I think that the ¥109 level is where we go to if we get a bit of bullish pressure. A break above the ¥109 level opens up the door to the ¥111 level, which I believe is the extreme top. In other words, I believe that we have a relatively short term consolidation area between the ¥107 and ¥109 levels, followed by a larger consolidation between the ¥105 level and the ¥111 level. I believe going into the weekend it makes sense that the markets are starting to get a bit sluggish because of all of the risks.