USD/JPY Price Forecast – US dollar continues to levitateThe US dollar continues to go sideways overall against the Japanese yen on Friday and what has been a very uneventful week. We are facing major resistance just above though, so we can’t gain traction.
The US dollar went back and forth during the trading session on Friday to end the week, as we continue to trade just below the ¥110 level. This is an area that is very crucial, because there is so much in the way of confluence at that handle. In other words, we have a lot of different reasons to think that this area will be important.
USD/JPY Video 11.02.19
We have the 50 day EMA, which is in red on my chart, as well as the round figure itself, ¥110. That in and of itself causes quite a bit of interest but the fact that this was the scene of a major selloff that kicked off the flash crash in this market will attract a lot of attention as well. Beyond that, we have the 61.8% Fibonacci retracement level just above, so there are a whole host of reasons to think that this pair will struggle.
However, we have seen a lot of resiliency here and therefore I think the market is building up inertia for its next move. We haven’t cleared that move, so at this point I would truthfully either be trading very short term charts, or beyond the sidelines altogether. I think eventually we will get an impulsive candle, and when we do we should be able to follow the candle stick. From a structural point, I believe that it is easier to short this market at this major resistance level, but the fact that we simply can’t break down and keep the losses makes me cautious.
Please let us know what you think in the comments below