USD/JPY Price Forecast – US dollar on the precipice

The US dollar broke down significantly during the trading session on Thursday, reaching down towards the ¥111.50 level by the time the Americans came on board. Quite frankly, this is the trade that people are looking at for next year, as the Japanese yen is expected to strengthen due to global fear. The session on Thursday screams “risk off.”
Christopher Lewis
USD/JPY daily chart, December 21, 2018

The US dollar broke down rather significantly during the trading session on Thursday, slicing through the uptrend line, and the 200 day exponential moving average. At this point, it comes down to which side of this yellow box on the chart that  the market closes, as to what I would look for next. If we can get a rally and break above the ¥112 level, then we will probably get a bit of a rebound.

USD/JPY Video 21.12.18

However, if we break down below the ¥111.50 level, and close below it, I think that will be the beginning of yen strength that’s going into next year. This would be a major “risk off” move, and most certainly we have plenty of reasons to worry about risk around the world. Beyond that, the Federal Reserve has suggested that it is going to become more “data dependent”, which could work against the value of the US dollar in favor of the Japanese yen and its safety currency status.

For what it’s worth, I know a lot of my contemporaries believe that the Japanese yen will strengthen into 2019, and I think with all of the global risk out there, it would make a lot of sense. Ultimately, it looks as if the ¥114.50 level above has held as major resistance yet again on the longer-term charts. Pay attention, we could be seeing the beginning of a big move lower, perhaps down to ¥110, maybe even ¥108 after that.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US