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USD/JPY Price Forecast – US dollar pulls back after initial rally

By:
Christopher Lewis
Updated: Nov 21, 2018, 16:50 UTC

The US dollar rallied a bit during the trading session on Wednesday, but then turned around to show signs of weakness as Core Durable Goods figures came out less than anticipated in the United States, which of course had risk appetite pulling back a bit.

USD/JPY daily chart, November 22, 2018

The US dollar has initially rallied during the trading session on Wednesday, but you can see that we give back some of the gains. It looks as if the ¥113 level has caused a bit of resistance, with the Core Durable Goods figures coming out later than anticipated in the United States. This of course had a bit of a risk off effect, and it makes sense that people jumped into the gang suddenly. Beyond that, liquidity was probably a bit of an issue as most American traders are focusing on Thanksgiving, and not the financial markets.

USD/JPY Video 22.11.18

Underneath current trading levels, I see a major uptrend line which is part of the up trending channel, as well as major support at the ¥112 level. Under their, we have the 200 day EMA which tends to attract a lot of attention. I think at this point we are in a very interesting level on the chart, as the most recent high was a bit lower than the previous one and it does look like the ¥114.50 level begins a massive resistance barrier that extends to at least the ¥115 level.

If we break down below the 200 day EMA, this market could unwind to the ¥110 level, perhaps even the ¥108 level. This would probably coincide with some type of selloff again in the equities markets, and a general “risk off” attitude around the world. At this point, the uptrend is still very much intact but it certainly is getting difficult.

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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