USD/JPY Price Forecast – US Dollar Falls Hard Against Japanese Yen

The US dollar has initially tried to rally during the trading session on Tuesday, but then fell hard to break through the ¥105.50 level. Ultimately, this is a market that I think will try to make a fresh, new low, meaning that we are going to drive down below the lows from a couple of weeks ago. Ultimately, I like the idea of fading short-term rallies, as the US dollar is most certainly on its back foot against everything, including the Japanese yen. The 50 day EMA has offered significant resistance, and four days ago we had formed what ended up being a “hanging man”, which of course is a very negative sign.

USD/JPY Video 19.08.20

All things being equal, this is a market that is clearly in a downtrend and I think it will go much lower. That is interesting considering that the true mark of failure of strength for the US dollar is the fact that the Japanese yen is picking up value, even as other currencies which are considered to be more “risk on” are as well. In other words, this is all about the US dollar strength and not some type of run towards safety by picking up the Japanese yen.

With this, the pair should continue to go lower but quite frankly it would not be surprising at all for me to see other pairs move a bit quicker, such as the GBP/USD or AUD/USD as stock markets are going fairly well, meaning that people are looking to put more risk on to begin with. In this pair, it is just about running away from the greenback.

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