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USD/JPY Price Forecast – US dollar looking to find support

By:
Christopher Lewis
Updated: Jul 31, 2019, 15:54 UTC

The US dollar is looking to find support against the Japanese yen, as we continue to hug the 50 day EMA. That being the case, the market looks as if it is trying to find its footing and continue to go to the upside.

USD/JPY daily chart, August 01, 2019

The US dollar has gone sideways a bit during the trading session on Wednesday as we await the Federal Reserve statement. Obviously, we already anticipate that there is going to be a Federal Reserve interest rate cut, but it is also very likely that we will see this market react to not only the interest rate cut, but the statement coming out. The statement of course should be extraordinarily dovish, perhaps signaling that there are going to be even more cuts coming.

USD/JPY Video 01.08.19

To the downside, if we were to break down from here it’s likely that the ¥108 level will offer support as well. Ultimately, I think that the market has plenty of buyers underneath as the stock markets have been strong. Stock markets do tend to move the pair in the similar and same direction, so I do think that it’s only a matter of time before we get an opportunity to take advantage of here. Ultimately, I am a buyer of this pair and I think that once we break above the ¥109 level, it will open up the opportunity to reach towards the ¥109.70 level.

That being said, if the Federal Reserve doesn’t cut interest rates that would obviously cause a bit of a shock, and a “risk off” move. We might see an initial surge higher in the US dollar, but that will be reversed as stock markets fall apart and people start running to the safety of the Japanese yen.

Please let us know what you think in the comments below

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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