USD/JPY Price Forecast – US dollar falls against Japanese yen on Wednesday

The US dollar fell hard against the Japanese yen as traders around the world began to fear the idea of a no deal Brexit. This has expressed itself in a huge “risk off” move, but at the end of the day we are at very significant support levels in this pair, so it would not surprise me at all to see a bit of a bounce. If we do drop from here, the next major support level is ¥110.50 level, followed by the ¥110 level, which is even more supportive. It is because of this that I believe the downward momentum in this pair is somewhat limited, and I would be looking for some type of buying opportunity.

This will be especially true if the stock markets around the world start to perk up again, which is something that could happen in the blink of an eye. Remember, markets aren’t necessarily rational, so it can be a simple tweet or rumor that has people thinking that the Brexit will go smoother than originally anticipated, and then the next thing you know everybody is selling the Japanese yen in a bid to pick up a bit of alpha.

If we were to break down below the ¥110 level, that would be a very negative move and would send this pair much lower. That would probably be accompanied by some type of bad news globally, and therefore wouldn’t be much of a surprise.

USD/JPY Video 09.08.18