USD/JPY Price Forecast – US dollar drops ahead of Federal Reserve meeting

The US dollar initially tried to rally on Tuesday but gave back quite a bit of the gains to fall towards the 50 day EMA. At this point, it looks as if the market is trying to find its footing, but with the Federal Reserve meeting coming, it’s difficult to imagine a scenario where we can get a lot of strength or weakness as the Federal Reserve statement will decide where we go next. With that in mind it’s very likely that the market will probably find it difficult to get moving in one direction or the other. However, as soon as we get that statement we should get quite a bit more in the way of clarity.

USD/JPY Video 31.07.19

With that in mind, I look at the ¥109 level as an important level to overcome. If we can break passed that level, the market is likely to go towards the ¥109.70 level. To the downside, the ¥108 level should be massive support. I do think eventually we will probably try to break higher because I believe that the Federal Reserve will give the markets what they want, meaning loose monetary policy and the stock markets rallying as a result. Ultimately, this pair does tend to move right along with risk appetite as seen by the S&P 500 and many other indices, so at this point I believe that paying attention to the reaction late on Friday is probably what is going to give you directionality in this market.

Please let us know what you think in the comments below