USD/JPY Price Forecast – US dollar continues to shrink against Japanese yen

The US dollar has fallen pretty significantly during the trading session on Monday, as we have pierced the ¥106 level. That of course is an area that will attract a lot of attention, as it is a large, round, psychologically significant figure. However, the market is well below the 61.8% Fibonacci retracement level, and that typically does mean that we will eventually go down to the 100% Fibonacci retracement level, which is closer to the ¥105 level. In other words, I fully anticipate seeing more selling.

USD/JPY Video 06.08.19

This doesn’t mean that we will get an opportunity to suddenly start selling, but I do think that rallies at this point should be looked at with suspicion. I like the idea of selling this market on short-term rallies that show signs of exhaustion. I don’t necessarily think that the market is ready to turn around and break to the upside, and I do think at the very least we will test that 100% Fibonacci retracement level again. This is a market that measures risk, and quite frankly there’s a lot of it out there. With that in mind I believe in fading rallies and have no interest whatsoever in buying this market until we take out the massive candle stick from Thursday. We are a long way away from doing so, so therefore this is a “sell only” type of situation from what I see. I do not like the idea of going long.

Please let us know what you think in the comments below