USD/JPY Price Forecast – US dollar rallies

The US dollar rallied significantly during the trading session on Monday to kick off the week, slicing through the ¥110 level. We are on the precipice of breaking out to the upside, which would be rather impressive considering how much destruction had been done. At this point, if we rollover at this point, we would need to clear the bottom of the candle stick from Monday to start selling.
Christopher Lewis
USD/JPY daily chart, February 12, 2016

The US dollar broke out and above the ¥110 level during the trading session on Monday, slicing through the 61.8% Fibonacci retracement level as well. However, we still have several hours to go in the US session, so we turned around a roll back below the 110 year level, that would be an extraordinarily negative sign, and then I think at that point the buying pressure will have finally abated completely. Overall, I believe that this move is going to be crucial, so waiting to see how it shakes out at the end of the daily candle stick is going to be crucial.

If we do continue to go higher, the 200 day EMA above, pictured in black, should be the next resistance barrier. Beyond that, the ¥111.50 level should also offer resistance, that extends to the ¥112 level. Overall, that would be an extraordinarily bullish sign though, because quite frankly we have busted through a lot of selling pressure. Otherwise, if we rollover and show signs of exhaustion at the ¥110 level, then I think the market probably will roll over completely, because it would have been such a huge repudiation of the rally. I believe that this market is going to be all over the place, so by all means be cautious about your position size. I think that’s the only thing you can count on: volatility.

Please let us know what you think in the comments below

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.