USD/JPY Price Forecast – US dollar loses steam against yenThe US dollar tried to rally during the trading session on Wednesday but struggled to continue going higher as one would expect as we have seen resistance just above recently.
The US dollar has been grinding higher against the Japanese yen for some time, but every time we get close to the ¥114 level, we pull back a bit and it looks likely that the uptrend underneath should continue to offer support. I think the uptrend line is an area where we see a lot of interest, and as we are getting close to the end of the year it makes sense that we could see a little bit of a lack of liquidity. Ultimately, this is a market that should eventually make a decision, but it may not be until 2019 that it happens. We are getting close to the end of the year and with a lack of liquidity, this will continue to struggle to make serious moves.
USD/JPY Video 13.12.18
Looking at the longer-term technical analysis, if we break down below the ¥112 level, we could continue to go much lower. Alternately, if we can break above the ¥115 level, then the market could go much higher. We continue to go very choppy between now and New Year’s Day, with a slightly upward tilt. However, if we do break down, it could be due to some type of huge “risk off event”, or if the Federal Reserve continues to look very hawkish, that could send this market in the other direction. Quite frankly, I think that the next couple of weeks in this pair is going to be difficult and it’s going to be a lot of back and forth on short-term charts. With that being the case, I think only scalping is going to be possible.