USD/JPY Price Forecast – US dollar rallies against Japanese yen

The US dollar has rallied against the Japanese yen during trading on Thursday, reaching towards the ¥111 level. Even if we break this level, there is still a significant amount of resistance every 50 pips as I have been saying. Because of this, I think this remains a short-term traders type of market, and if we can get an opportunity to trade a quiet market, that might be the best way to play this pair. However, I’m the first person to realize that perhaps some news flow could change things. Remember, this pair is somewhat risk sensitive, and it could move on headlines coming out of Sino-American relations.

I certainly believe that the longer-term fundamentals favor the US dollar, because quite frankly the interest rate differential between the economies is only going to widen, not shrink. That should help this pair over the longer-term, but we also are focusing on so many other things right now that it’s difficult to imagine a scenario in which any trading is going to be easy. Factor in the reality that most larger traders are away at holiday, and then you could be talking about a recipe for choppiness and indecision. This is why I advocate range bound trading on shorter time frames right now, because I think that’s probably the best way this is going to play out for retail traders over the next couple of weeks.

USD/JPY Video 24.08.18