USD/JPY Price Forecast – US dollar pulls back

The US dollar has fallen a bit during the Japanese yen during trading on Wednesday, reaching down towards the ¥110 level. That being said, it looks as if we are starting to find our sea legs as it were, and now it looks as if we will try to find a reason to rally. As long as we can stay above the ¥109.50 level, we should turn around and try to fill the gap from the beginning of the week. That being the case, it looks as if the buyers are trying to step in and defend the pair.

USD/JPY Video 09.05.19

It does look as if we are trying to form a hammer, and that of course is a very bullish sign. The 200 day EMA is sitting right at the gap from the Monday session, which of course is a good sign. Ultimately, this is a market that measures risk appetite, and as a result you should pay attention to the S&P 500. It does look as if it’s trying to hold the line, so if that’s going to be the case, this should benefit the USD/JPY pair. Ultimately, I believe that the market could very well fill the gap and then try to go back towards the ¥112 level. If we get good progress between the Americans and Chinese over the next couple of days, I suspect that this pair will finally break out to the upside. Obviously, if things fall apart between the two countries, we will probably break down below that ¥109.50 level, possibly towards the ¥108 level.

Please let us know what you think in the comments below