USD/JPY Price Forecast – US dollar falls against Japanese yenThe US dollar pulled back against the Japanese yen during the trading session on Tuesday, as we had gotten a bit ahead of ourselves in this rally. We are seeing a lot of resistance right where you would expect to based upon the massive flash crash that happened.
The US dollar has pulled back a bit during the trading session on Tuesday, as the ¥110 level has been a bit too resistive to buyers. At this point, I think that the 61.8% Fibonacci retracement level will of course come into play, just as the 50 day EMA will. At this point, I think that signs of exhaustion on short-term rallies are selling opportunities, and that we will probably go back to test the ¥108 level. If we break down below there, then the market probably goes down to the ¥105 level, as it was where the flash crash stopped.
USD/JPY Video 23.01.19
At this point, I think that the market participants will be a bit leery due to the Federal Reserve being on the sidelines, and of course we had recently broken through a major uptrend line. Beyond that, we have a “death cross” that had formed, so I think that it makes sense that a lot of people will be looking to get short of this market. The Japanese yen of course is a safety currency, so if you see a bit of a major negative headline out there, it will probably turn this market lower as well. Beyond that, the Bank of Japan looks likely to on quantitative easing going into 2019, at least that’s what traders are betting on right now. If that’s the case, a drop lower makes a lot of sense in this pair going forward.