USD/JPY Price Forecast – US dollar looking for supportThe US dollar broke down below the ¥112 level during the early hours of Monday but has found a little bit of support near the ¥111.50 level, an area of previous resistance. At this point, it looks as if we are trying to form some type of bottoming pattern, but I think you should be very cautious if you are looking to go long.
The US dollar pulled back a bit during the trading session on Monday but did find a bit of support near the ¥111.50 level, as we have seen an area that has been massive resistance. I think the ¥112 level of course is going to be attracted for traders on both sides, so at this point I think that there is a thick wall of selling between here and ¥112.50, so it’s going to be tough. I would be very cautious about going long, at least with a large position. You will need to see this market prove itself going forward to add significant money to your position, so be cautious.
If we were to break down below the 100 level ¥0.50 level, then I think we could probably go down to the ¥111 level. Overall, I do believe that we are getting close to the bottom of the selloff, so I’m willing to put a little bit of money to work, but I may do so in a safe or currency pair such as the CHF/JPY currency market. That’s because both of those are considered to be safety currency, so although it may be slower, it could give us an opportunity to keep our losses a bit smaller if the trade goes against us. However, I do believe that eventually the buyers will prevail in this scenario.