USD/JPY Price Forecast – US dollar continues to grind higher

The US dollar has bounced from the bottom of the channel recently, and it looks as if we will continue to grind higher. At this point, if we can break the ¥113 level that would be a very good sign, but we may need to pullback in the meantime so that we can build up a bit of momentum. Keep in mind that this pair is highly sensitive to risk appetite so pay attention to the S&P 500 and the 10 year yields, as interest rates will drive this pair as well.

I think at this point, we are simply going to sloppily grind to the upside over the longer-term, but I would do so in small bits and pieces and simply add every time we make a fresh, new high to build up a larger position. We have bounced from the 61.8% Fibonacci retracement level which is important as well, so I think it’s not until we break down below the ¥111.50 level that I think that the uptrend would be broken down significantly.

I also recognize that the ¥114.50 level above is massive resistance, so breaking above there is going to be difficult. Ultimately, if we do break above there then it opens the door to the ¥115 level, and a break above that becomes a “buy and hold market”, and a sign that perhaps we have weathered the economic storm overall, continuing to drive towards the ¥120 level which is my longer-term target, but only after we can break above the significant resistance at ¥115.

USD/JPY Video 25.10.18