USD/JPY Price Forecast – US dollar goes sideways

The US dollar went back and forth during the trading session on Wednesday as we continue to see a lot of noise just below the ¥112 level. In order to go higher over the longer-term, we are more than likely going to need to see the 112 level cleared significantly, perhaps based upon a daily close. If we can get that, then it opens up the possibility of a move to the ¥113.50 level, an area that was the scene of massive selling. Typically, this pair will move right along with the S&P 500 so if it breaks out it’s very likely that this market will as well.

USD/JPY Video 02.05.19

The opposite scenario would be a significant break down below the ¥111 level, which would clear the 200 day EMA. At that point, the market probably goes down to the ¥110 level next. In general, I suspect there’s probably more interest in going higher but we need a little bit of a boost to make that happen. Ultimately, this is a market that has been very choppy as of late but has drifted higher over the longer-term. With that in mind the idea is that most pullbacks should represent a potential value play that people will take advantage of. If that’s going to be the case, then short-term charts that show signs of support on a pullback should be the best way to play this market. As far as shorting is concerned, I suspect that any pullback from this area that has legs will probably find plenty of buyers underneath. If we broke down below the ¥110 level though, that could change the entire outlook.

Please let us know what you think in the comments below