USD/JPY Price Forecast – US Dollar Explodes to The Upside

The US dollar has rallied significantly during the trading session on Friday, reaching towards the ¥107.50 level. At this point, the market has seen a lot of selling pressure in this area and I think that we may run out of steam here. Furthermore, I can also make an argument for the 200 day EMA above offering an opportunity for sellers to get involved into as well. I believe that the market is more or less more short covering than anything else, and of course there is hope that fiscal stimulus will start to kick the economy back in the right direction. At this point in time, we are still waiting to see what happens to the response of the United States government, so at this point it’s very likely that the markets will probably either get the news late on Friday, or over the weekend. This could lead to a massive gap either higher or lower.

USD/JPY Video 16.03.20

Ironically, if we can get some type of fiscal stimulus coming out the United States, it might actually work in favor the US dollar in this pair as the Japanese yen is such a major safety currency. At this point in time though, if the market doesn’t get that we may see the US dollar fall to the Japanese yen and it will probably cause chaos Monday morning. Unfortunately, all I can do is point out that the ¥107.50 level should offer a bit of resistance so it’s worth paying attention to.