USD/JPY Price Forecast – US dollar pulls back

The US dollar initially tried to rally during the trading session on Tuesday but struggled at the ¥111.50 level. This is the beginning of a 50 pips major resistance barrier. We are sitting just above the 200 day EMA though, so there are a lot of conflicting issues going on at the same time. If we can break down below the 50 day EMA, the red moving average on the chart, then the market will probably unwind and reach towards the ¥110 level, perhaps down to the ¥108 level.

USD/JPY Video 13.03.19

If we can break above the ¥111.50 level, then I think the market probably goes to the ¥112 level. A break above the ¥112 level would be a major break out. I think it would take a lot of momentum building and obviously a very good turn of events to make that happen. The market is highly correlated to the S&P 500, so will have to see if that can break out. If it does, that should help this pair, but obviously you have to trade it on its own merits. Think of the S&P 500 as a tertiary signal more than anything else.

Looking at this chart, I think the one thing you can expect is a lot of volatility because of all the competing factors, and as a result the USD/JPY pair is very likely to be difficult to trade in the near term, and it’s very likely that the market is probably best left alone until we get one of the signals.

Please let us know what you think in the comments below