USD/JPY Price Forecast – US Dollar Continues to Drift Lower

The US dollar fell against the Japanese yen during trading on Monday to kick off the week and show further weakness. This is a market that has been in a downtrend for quite some time, so it is difficult to imagine a scenario where we should be buying this pair. At this point, people are concerned about whether or not there is going to be a massive “risk off” type of scenario, because quite frankly there is a massive amount of things to worry about in the world. Furthermore, what is a bit strange is that the Japanese bond markets are paying more in interest than the US bond markets, something that defies the normal conventions.

USD/JPY Video 13.10.20

To the downside, the ¥105 level underneath is a large, round, psychologically significant figure, and that of course will attract a lot of attention in and of itself. However, we have broken through there are a couple of times, so that suggests that we should be able to do so without much fanfare. The lows that we just made a couple of weeks ago was well below there, and now suggests that the market will go looking towards the ¥104 level underneath.

Breaking down below there then opens up the possibility of a move much lower, perhaps down to the ¥102 level. Ultimately, this is a market that will continue to be very noisy, but I do not have any interest whatsoever in trying to buy this pair anytime soon, because the longer-term trend is most decidedly negative and has been rather relentless over the last several months.

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