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

The US dollar has fallen against the Japanese yen during trading on Friday, reaching down towards the ¥110.50 support level. That area has held as of this moment, and I think there is a significant amount of support there. Quite frankly, I think a lot of the selling may have had to do with contagion fears coming out of Europe, as European banks are dangerously exposed to Turkey. The Turkish lira lost over 11% during the day, which could be devastating for European banks. That being said, I think that the market also is looking at the weekend ahead and realizing that anything can happen, so doesn’t want to hold too much in a risk-averse pair.

I believe that the ¥110.50 level should hold though, but if it doesn’t there’s even more support below at the ¥110 level. Longer-term, I recognize the ¥109 level is the bottom of the overall consolidation area that extends all the way to the ¥113 level above. All things being equal, I believe that the buyers will return sooner or later, but I wouldn’t put too much faith or money into this market right now as writing was very rattling to the nerves for most traders around the world. I think at this point, the market is probably best played from a short-term range bound perspective, allowing people to place small trades for small time frames at best.

USD/JPY Video 13.08.18