USD/JPY Price Forecast – US Dollar Drifts Lower Against Japanese YenThe US dollar has initially gapped lower to kick off the trading session on Monday, but then turned around to fill the gap. After that, the market broke down below the ¥111 level.
The US dollar has fallen a bit against the Japanese yen during the trading session on Monday to kick off the week, as coronavirus fears continue to accelerate. That being said though, we have seen a bit of a shunning of the Japanese yen as money runs away from Asia. Ultimately, the Japanese yen is considered to be the “safety currency of choice” most times, but at this point with the coronavirus hitting China and now starting to show up in Japan and South Korea, people are starting to send money out of those countries.
The Korean Won has been crushed, and of course the Japanese yen is starting to feel the pinch as well. The pullback may have been due to an overbought condition more than anything else, so at this point a pullback does make some sense. However, I think that the ¥110 level is massive support, as it was massive resistance. I would be stunned to see this pair breakdown through there, unless of course some type of catalyst coming out the United States itself.
USD/JPY Video 25.02.20
At this point, I’m looking for some type of bounce or stable candle in order to go long. If we were to break down below the ¥109.50 level, then the market is very likely to go looking towards the ¥108.50 level rather quickly. All things being equal though, this is a simple pullback after a breakout and it should be noted that the break above the ¥110 level was crucial, as it was the middle point between the ¥105 level on the bottom of the longer-term consolidation area, and the ¥115 level above is the top of that range.