USD/JPY Price Forecast – US dollar continues to find support underneath

The US dollar pulled back slightly during the trading session on Tuesday, but found support just above the 200 EMA, pictured in black on my chart. By doing so, it looks as if we continue to find value hunters in this pair, and it also appears that we are trying to break above the major resistance level that I have marked on the chart. That resistance level extends from ¥111.50 to the ¥112 level above there. If we can clear that level, it would be a very bullish sign for the pair going forward.

USD/JPY Video 20.03.19

If we get above there, the market probably reaches towards the ¥113.50 level above, but it may take a significant amount of time to get there. On the reverse side of the trade, if we break down below the ¥111 level, the market could go down to the ¥110 level. That’s an area that will cause significant support, but if we break down below there it’s likely that we go to the ¥108.50 level, possibly even the ¥108 level.

This week features the Federal Reserve, and it’s very likely that we will continue to see the Federal Reserve seemed dovish, which should be good for equities. In a bit of reverse psychology, this pair will rally due to the fact that it is a risk sensitive market. Also, you can pay attention to the stock markets for a bit of a heads up as to where we may go, as this pair does tend to follow the S&P 500 over the longer-term.

Please let us know what you think in the comments below