USD/JPY Price Forecast – US Dollar Continues To Suffer At Hands Of Yen

The US dollar has gapped lower to kick off the week against the Japanese yen, turned around to fill that gap, and then fallen yet again. This is pretty much how the markets have gone during the trading session, as they have undulated between gains and losses with all things financial. I do anticipate that the market is probably looking at a scenario where there is going to be extreme volatility, and therefore position size is simply must be smaller than usual. Having said that, it looks as if the market is pricing in at least 50 bps of interest-rate cuts by the Federal Reserve, and that has weighed upon the US dollar in general. Further exacerbating this pair is the fact that there has been a run to the Japanese yen for safety. The question now is whether or not that stays the case?

USD/JPY Video 03.03.20

We are seeing what is known as a “rolling bear market”, although not necessarily technically bear markets. What I mean by that is markets are selling off one asset, and then going on to another one in order to raise liquidity. There is no real rhyme or reason to this, this is all algorithmically driven, which makes it extraordinarily dangerous. With that in mind you simply must keep your position size small no matter what you are trading, be it this pair or any other. Having said that, the market does look as if it probably has a bit more downside to it and rallies are to be faded as we are below the 200 day EMA. However, if the market was to close above the ¥108.50 level, then a rally back to the ¥110 level makes sense.