USD/JPY Price Forecast – US dollar pulls back slightlyThe US dollar pulled back slightly during trading on Thursday, as the US dollar loss against most major currencies. The downward trend line above that I’ve been talking about seems to have come back into play again.
The US dollar rallied initially during early trading on Thursday but pulled back enough to give value hunters an attempt to pick up the pair at ¥112. The market looks likely to continue to struggle overall, because of the major downtrend line that is just above on the daily charts. I think that given enough time, we will probably continue to see major volatility in this pair. The never-ending saga between the Americans and the Chinese will continue to put bearish pressure on this market, but I do recognize that eventually something will have to give. Right now, it looks as if the market participants will continue to have to deal with a major amount of chopped, as the market simply doesn’t know where to go.
At this point, this is one of my least favorite pairs to trade, because it simply changes direction every couple of hours it seems. The volatility isn’t extreme though, because quite frankly it can’t go anywhere. If you are looking for micro movement, this will be your market. Otherwise, you will more than likely be better served trading the US dollar against other currencies presently. On a day were both the Euro in the Pound broke out, it may be just a little too much for the US dollar to overcome against the Japanese yen. Stock markets are rallying at the same time, so that does of course provide a little bit of support for this pair, but at the end of the day it still faces an uphill climb. Every 50 pips or so seems to be important.