USD/JPY Price Forecast – US dollar pressing major resistanceThe US dollar rallied a bit during the trading session on Monday, reaching towards the ¥110 level. This of course is a large, round, psychologically significant figure that should attract a lot of attention.
The US dollar rallied significantly during the trading session on Monday, reaching towards the ¥110 level. Beyond that, we have the 50 day EMA parked at that level as well. The 61.8% Fibonacci retracement level is just above as well, and of course we have a major cluster of order flow as well. That being the case, I’m looking for some sign of exhaustion to get involved, so that we can start shorting this market again. After all, the Federal Reserve has softened its stance lately, and that should weigh upon the US dollar.
USD/JPY Video 05.02.19
That being said, I think that the Japanese yen is on its back foot in the short term, but I do believe that there is plenty of reason to think that the sellers will come back in, perhaps some type of negative economic event. If we get some type of negative headlines coming out of the US/China trade negotiations, that of course could send this pair much lower as well. It becomes a “safety play” at that point as we start to sell off and see money go back to Japan.
If we do break down from here, I think there is plenty of resistance between here and the ¥111 level, as the 200 day EMA is starting to come into play as well. Looking at this chart, it seems that the most impulsive action has been to the downside, and typically that leads to more of the same given enough time. Expect choppy conditions but I’m still looking for a short set up.
Please let us know what you think in the comments below