USD/JPY Price Forecast – US dollar continues to rally

The US dollar rallied significantly again during the trading session against the Japanese yen on Wednesday, reaching towards the 200 day EMA. This is a market that has been extraordinarily bullish, but at this point I think we are starting to run into the very heart of the major resistance barrier as we are testing the 200 day EMA. Quite frankly, this has been a rather surprising rally considering the strength of it, but the 200 day moving average and the block of trading that led to the flash crash is right in this area.

USD/JPY Video 14.02.19

Looking at this chart, the US dollar had a rollover rather significantly at higher levels. In from the absolute top we are now testing the 61.8% Fibonacci retracement level. With that and the 200 day EMA in the same region, it’s very likely that there will be a certain amount of interest in shorting this market here. However, until we get some type of an exhaustive candle, it’s going to be difficult to short this market. That being said, I think at this point it’s difficult to buy this market either. Look for signs of weakness or exhaustion, then it’s time to start shorting.

Ultimately, I think that the market will continue to be very noisy, but I think at this point we have gotten a bit ahead of ourselves. Looking at this chart, I recognize that there is an even more stringent resistance area extending from the ¥111.50 level to the ¥112 level. This market is starting to find a lot of trouble in this general vicinity.

Please let us know what you think in the comments below