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USD/JPY Price Forecast – US Dollar Plunges

By:
Christopher Lewis
Published: Mar 16, 2020, 14:45 UTC

The US dollar plunged against the Japanese yen during trading on Monday as the panic continues over coronavirus infections. At this point, the lack of serious central bank action out of Japan has bolstered the Japanese yen.

USD/JPY Price Forecast – US Dollar Plunges

The US dollar initially tried to rally during the trading session on Monday, as the Federal Reserve cut interest rates drastically. However, fear injured the market again and we felt right back down. With this, the market is likely to plunge below the ¥105 level, but there will be the occasional rally that comes into the market on the short-term charts. Those should be selling opportunities as the market has clearly found quite a bit of stress.

USD/JPY Video 17.03.20

The 200 day EMA and the 50 day EMA are getting ready to cross to the downside again, but it is also an area where we have seen the market rolled right back over at that level. Ultimately, this is a market that is going to continue to see significant volatility, so therefore you should keep your position size smaller than usual as there will be sudden headlines that can move this pair 100 pips in the blink of an eye as headline readers auto trade currency pairs these days. This volatility will probably be even worse than it was in 2008, because so many more trading desks employ algorithms.

To the downside, I anticipate that this pair will probably go looking towards the 102 level again, but it is not necessarily going to get there in a straight line. Because of this, protecting your account by using smaller position sizes will be absolutely crucial. Remember, even though a sudden move in your direction could make you quite a bit of money, the exact opposite is true as well. Professional traders worry about their risks, while retail traders worry about what they could possibly make.

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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