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USD/JPY Price Forecast – US dollar falls against yen

By:
Christopher Lewis
Updated: Nov 15, 2018, 16:19 UTC

The US dollar fell against the Japanese yen during trading on Thursday, as we continue to have a bit of a “risk off” attitude. This is a market that had gotten a bit overextended, and I think this pullback is probably necessary.

USD/JPY daily chart, November 16, 2018

We have continued to see a bit of a pullback in the USD/JPY pair, and I don’t necessarily think that this is some type of super negative move waiting to happen, I think it’s simply the market trying to pick up enough momentum to continue to attack the 114 ¥0.50 level. That’s an area that extends to the ¥115 level, and I think there is a lot of resistance in that area that will be very difficult to chew through. If and when we can finally do that, then the market probably goes much higher. In the meantime, I think there are far too many issues out there to be comfortable trying to go long of this market for a significant amount of time.

USD/JPY Video 16.11.18

There is an uptrend line underneath, the 200 day EMA and of course the ¥112 level all of which are offering support. Overall, this is a market that should continue to be bullish longer-term, because of the interest rate differential. After all the Federal Reserve is looking to raise interest rates at least three or four more times, while the Bank of Japan isn’t even talking about it at this point. However, this pair is also sensitive to the trade war situation which quite frankly hasn’t gotten any better recently and I don’t think it’s going to in the short term. The Americans are not suffering at the hands of the trade war, and although the Chinese are, they are pretty stubborn when it comes to these type of situations.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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