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USD/JPY Price Forecast – US dollar pulls back against Japanese yen

By:
Christopher Lewis
Updated: Jan 17, 2019, 17:01 UTC

The US dollar has pulled back during early trading on Thursday, as the ¥109 level has offered significant resistance. By pulling back the way it has, the market looks very likely to continue to chop between the 100 a young level underneath and the ¥109 level above.

USD/JPY daily chart, January 18, 2019

The US dollar pulled back a bit during the trading session on Thursday, as the ¥109 level has been massive as resistance yet again, and even though we have had a pullback, it wouldn’t surprise me if we retested it. I think we are going to continue to bounce around in this 100 pips range, with the ¥108 level underneath. Once we break down below there though, the market could drop to ¥107, and then possibly as low as ¥105.

USD/JPY Video 18.01.19

Above, the ¥110 level above is massive resistance, and I think it’s going to be very difficult to break above there. The 61.8% Fibonacci retracement level is just above there as well, so I think it’s going to be resistive as well. With that being said, I think anytime that we rally, there will be sellers willing to push it back down. Beyond that, I think it’s very interesting to notice the correlation between this pair and the risk appetite of markets in general. There is high correlation between this pair and the S&P 500, as both are highly sensitive to risk appetite around the world. That being the case, I think it’s only a matter of time before we get more trouble on the horizon as the US/China trade talks continue to stall a bit, and then of course we are in the middle of earnings season which will have a major effect on the US dollar itself. That being the case, we have had a nice grind higher but we are still decidedly bearish.

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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