USD/JPY Price Forecast – US dollar is showing signs of life

The US dollar fell initially during the trading session on Tuesday, breaking below the ¥108 level which of course is a significant round figure. However, the 61.8% Fibonacci retracement level underneath is also going to offer support. The fact that we have turned around of form a bit of a hammer suggests that we are going to go higher and looking towards the ¥109 level. This doesn’t mean that it will be an easy trade, but it certainly looks as if we are trying to find some type of floor so that we can turn things around. Keep in mind that this pair is highly sensitive to risk appetite and one of the best proxy markets to use for that is the S&P 500.

USD/JPY Video 05.06.19

At this point in time, if we were to turn around and break down below the 61.8% Fibonacci retracement level, which is roughly ¥107.70, the market will probably completely unwind and go looking towards the ¥105 level. Ultimately though, this is a marketplace that continues to try to find a bottom, so therefore I do think that a bounce it is somewhat imminent. Ultimately, the US dollar is oversold and so is the S&P 500.

That being said, I would expect a lot of trouble near the ¥109 level that extends all the way to the ¥109.70 level. I don’t even think we can get above there anytime soon, and it would not surprise me at all to see this market struggle there, at the same time seeing a bit of selling pressure at the S&P 500.

Please let us know what you think in the comments below