USD/JPY Price Forecast – US Dollar Quiet Waiting on Fed

The US dollar has gone back and forth against the Japanese yen in relatively quiet trading on Tuesday as we await the results of the Federal Reserve meeting, which coincides with an announcement at the end of the session on Wednesday. Ultimately, this is a market that I think continues to see a lot of choppy behavior, but it certainly looks as if the channel has held so far. If that is going to be the case, then the market is going to continue to push to the upside.

USD/JPY Video 16.06.21

If we do pull back a bit, then the 50 day EMA is going to continue to reach to the upside, perhaps offering a bit of a trendline of support, so therefore I think even if we do get a little bottle pullback, it is not a huge problem. This is a pair that I have no interest in shorting until we break down below the 38.2% Fibonacci retracement level, which is closer to the ¥108 level below. If we break down below there, then it is likely that we could go much lower, perhaps reaching to the ¥105 level, but that would probably be a huge “risk off” type of situation.

To the upside, the ¥111 level has been an area of significant resistance, not only from the last time we were there but historically speaking. It is because of this that I am not surprised that we are grinding towards that area, but if we break above there then it is likely that we could go towards the ¥112 level.

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