USD/JPY Price Forecast – US dollar looking for support

The US dollar went back and forth during the trading session on Monday, as we tested the ¥108 level. That level has been important more than once, so it makes sense that the market would find buyers in that region. That being said, I believe that the market will probably continue to be very choppy, but this area features both the ¥108 level and the 61.8% Fibonacci retracement level. Signs of life in that area should send the market back towards the ¥109 level, but if we were to break down below there, things get ugly.

USD/JPY Video 04.06.19

A break down below the 61.8% Fibonacci retracement level typically means that we are going to wipe out the entire move. That could send the market down to the ¥105 level, which of course is a large, round, psychologically significant figure as well. Overall, I think this is essentially a 50-50 opportunity. It’s essentially a binary trade just waiting to happen. If we can break above the ¥109 level, then we will grind towards the ¥109.70 level, which breaking above that allows the market to reach towards the ¥111.15 level, which was the scene of a major gap.

Fading rallies probably works longer term but be aware of the levels that I have just mentioned. Pay attention to the S&P 500 as well, because quite frankly it will drive risk appetite, and that of course will continue to drive this market as well. This is all about risk appetite, and it will rise and fall right along with it.

Please let us know what you think in the comments below