USD/JPY Price Forecast – US dollar rallies against yen during Wednesday session

With one potential major trade war flareup starting to subside, this gives traders the opportunity to start selling the Japanese yen, the ultimate safe haven currency. Currently, it looks as if the market is trying to break out to a fresh, new high, and I think we will probably do so eventually. However, short-term pullbacks are probably necessary to build up the required momentum, which will certainly be an explosive move just waiting to happen. With that being the case, I think that the market will ultimately show signs of momentum but remember that there is a major downtrend line on the weekly charts somewhere near the ¥112.50 level. We need to clear all of that noise to get more of a “buy-and-hold” scenario. In the meantime though, I think short-term buying on the dips will work.

If we did break down below the ¥111.40 level, then I think the market probably goes looking towards the ¥111 level. Ultimately, I think that this is a market that is trying to build up its upward momentum, and I think that people are starting to focus more on the fundamentals between the two currencies, and the fact that the trade war between the United States and China is not quite critical yet. If it does start to get worse, that will certainly be difficult for this market to overcome. Expect volatility, but I still favor the upside overall based upon recent momentum, and the longer-term charts, specifically the weekly timeframe.

USD/JPY Video 06.09.18