USD/JPY Price Forecast – US Dollar Rallies Against Japanese Yen

The US dollar has rallied a bit during the trading session on Monday to kick off the week but has to deal with the 200-day EMA above. That is a longer-term resistance barrier and will attract a lot of attention. Beyond that, we had a major breakdown candle at the ¥109.50 level above. In other words, there is a ton of resistance in this area. It’s not that this pair can’t rally and breakout to the upside, just that it needs a lot of momentum to enter the market in order to do so.

USD/JPY Video 29.10.19

All things being equal, it’s probably easier to buy short-term pullbacks against this market than anything else. The ¥108.50 level underneath should continue to offer support, just as the 50-day EMA will which is painted in red on the chart. It doesn’t necessarily mean that this market should be shorted, but pullbacks are to be expected. Those pullbacks should be thought of as potential buying opportunities.

One thing to pay attention to is the correlation between the USD/JPY pair and the S&P 500. The S&P 500 continues to slam against the all-time highs, trying to break out. If the market was the breakout above those all-time highs, the US dollar should follow right along against the Japanese yen as it is a highly risk sensitive currency pair. In general, I am bullish of this pair, but I recognize that it is very difficult to get excited about the market right now as it is struggling so hard.

Please let us know what you think in the comments below