USD/JPY Price Forecast – US dollar gives up gains

The US dollar has initially tried to rally against the Japanese yen during trading on Friday, but we have given back quite a bit of the gains. That being said, the range is somewhat short, so that’s probably the one good thing about the candle stick. Keep in mind that the United States and China are discussing trade relations during the day, so at this point almost anything can happen. However, there are couple of levels that I am paying attention to that could come into play here.

USD/JPY Video 13.05.19

If we break above the highs from the Thursday session, then I think we go to the upside and look to fill the gap which is at roughly ¥111. Forex markets hate gaps, and they do get filled eventually. That’s not to say it has to happen now, because quite frankly I’ve seen gaps get filled two months later, but it happens eventually. With that being said I do have a somewhat bullish bias, but if we get bad news out of the US/China trade talks I’m sure that this market will probably break down.

On the breakdown, if we sliced through the bottom of the Thursday candle, then it opens up the door to ¥109, and then to the ¥108 level. One thing I think you can count on is a bit of volatility, but again I’m looking for an opportunity to fill the gap as markets tend to look for vacuums in volume that gaps represent. One thing is for sure, this is about to get really volatile.

Please let us know what you think in the comments below