USD/JPY Price Forecast – US Dollar Continues To Grind Against Japanese Yen

The US dollar has rallied a bit during the trading session on Monday, digging into the shooting star from the Friday session. That is a very strong sign as we continue to fight the sellers. Having said that though, there is still a lot to do in order to continue going higher. Breaking above the ¥110 level would open up the floodgates to a move to the ¥111 level, the scene of a serious gap. That obviously will have people looking for resistance, but if we can break above there then it’s likely that the market goes all the way to the 100% Fibonacci retracement level, near the ¥112.50 level.

However, it’s more likely that we pull back a little bit to grind back into the consolidation in order to build momentum. Momentum is exactly what this pair will need, or some type of good news from a geopolitical situation or even macroeconomic sense. Ultimately, this is a market that will continue to move on the latest headline, but the real levels to pay attention to or not only the ¥110 level, but also the ¥108.50 level. The grind back and forth will probably continue, and I suspect that over time we will eventually build that necessary momentum, as the “golden cross” has formed recently. However, I think after the action on Friday it’s probably asking a bit much to have that breakout happen now. We will more than likely pull back and fade a bit before making another return to these levels.

Please let us know what you think in the comments below