USD/JPY Price Forecast – US dollar falls against Japanese yen to find support

The US dollar has broken down a bit during the trading session on Tuesday, reaching towards the previous downtrend line that had been so important in this market. By doing so, it looks as if we are trying to pull back from the recent rally, and this is why I had previously mentioned the ¥110 level as being so important. I think that the market will probably continue to find plenty of volatility due to the trade war issues if it concerns about Sino-American relations.

It’s not a huge surprise to suggest that perhaps the markets will continue to be very noisy, but as we head into the July 4 holiday, keep in mind that the United States will be celebrating Independence Day, and therefore markets will be very quiet during at least half of the session. With this in mind, there’s also the possibility that we are seeing a bit of profit taking ahead of the holiday.

If we can break above the ¥111 level, then I think that the market is much more believable as far as a longer-term trade is concerned. I believe that longer-term trades are difficult to have anyway, as there are so many headlines out there that could cause major issues. I believe that longer-term aspects of the market will continue to be very noisy, and that will of course show itself in this extraordinarily volatile pair.

USD/JPY Video 04.07.18