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