USD/JPY Price Forecast – US dollar pulls back for Thursday session

The US dollar fell a bit during the trading session on Thursday, testing the hammer that had formed on Wednesday. That’s a negative sign, but we do have a significant amount of support just below. Because of this, I anticipate a lot more choppiness.
Christopher Lewis
USD/JPY daily chart, February 08, 2019

The US dollar has fallen a bit during the trading session on Thursday, as we continue to be mired in choppiness. At this point, the 50 day EMA continues to offer resistance just above at the vital ¥110 level. This of course is a round figure that will cause a lot of issues, as it has in the past. Beyond that, we have the 61.8% Fibonacci retracement level just above that should continue to offer plenty of reasons to sell as well. However, the hammer from the trading session on both Tuesday and Wednesday does give me a bit of a pause, so I think at this point we are building up inertia to move in one direction or the other with vigor.

USD/JPY Video 08.02.19

I prefer to the downside, because I think that the stock market is getting a bit stretched, and of course the US dollar is a bit soft during the latest move overall against most currencies as the Federal Reserve is stepping away from its hawkish stance. Ultimately, I do think that this market probably pulls back but I’m willing to work with the other side of the trade if we get an impulsive move higher. At that point, I believe that the 200 day EMA will cause resistance, just as the ¥111.50 level certainly well. At this point, I think you are looking a lot of short-term choppiness, but ultimately we should get some clarity in the next few sessions.

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