USD/JPY Price Forecast – US dollar continues to teeter back and forth

The US dollar rallied a bit during the trading session early on Wednesday but continues to see a lot of resistance just above at the ¥107 level. At this point, it looks as if we are going to continue to see more of the same.
Christopher Lewis
USD/JPY daily chart, August 22, 2019

The US dollar rallied a bit during the trading session on Wednesday, but then gave back quite a bit of the gains by the time traders in New York woke up. This is a market that we continue to jump back and forth, as the ¥107 level has offered so much in the way of resistance. Underneath, the ¥105 level offers a lot of support, so at this point in time I think we remain somewhat range bound as we await the Federal Reserve Meeting Minutes, and perhaps even more importantly, the Jerome Powell speech at Jackson Hole.

USD/JPY Video 22.08.19

All things being equal, the US dollar should continue to soften against the Japanese yen because if anything, the greenback is going to continue to be a bit soft against the Japanese yen as we have so many questions out there about the global growth and geopolitical problems, and of course it’s very likely that the Federal Reserve will cut rates. While that should be good for the stock markets, the reality is that I think we continue to see a lot of people run to safety. That generally favors the downside in this market as the Japanese yen is considered to be a “safety currency.” With that in mind, it makes sense that we will continue to see the market try to plow into the ¥105 level, and then perhaps even lower than that. At that point, I anticipate that the rallies will continue to be faded, and that’s probably the best way to play this market.

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