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USD/JPY Price Forecast – US dollar initially rallies but fails

By:
Christopher Lewis
Updated: Nov 20, 2018, 17:27 UTC

The US dollar initially rallied against the Japanese yen during the trading session on Tuesday but rolled over to show signs of weakness. However, we are still in an uptrend, so buying would still be the prudent thing to do.

USD/JPY

The US dollar initially tried to rally during the trading session on Tuesday but failed to continue to go higher. The market has significant support underneath though, as there is a major uptrend line underneath, which coincides nicely with the ¥112 level, an area of support that extends down to the ¥111.50 level. If we were to break down below that level it would be very negative for this market, and I think could send this pair back down to the ¥110 level. Ultimately, that could unwind this pair even further. The one thing that works in the favor of the scenario is that the latest high was lower than the previous one.

USD/JPY Video 21.11.18

However, you can make an argument for buyers to step back in relatively soon, especially if the market starts to see a bit of risk-taking out there. That tends to push this market to the upside, as the market is clearly in and uptrend. I think at this point the market would probably try to reach towards the ¥114.50 level again, which extends to the ¥115 level. If we can break above that level, then we could go much higher but I think it’s going to take a significant amount of momentum to make that happen. This also will need some type of headline or some type of catalyst for the markets to finally make that a break out. If it does happen, that would be an extraordinarily bullish sign and could lead a lot of longer-term traders to adopt a buy-and-hold scenario.

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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