USD/JPY Price Forecast – US Dollar Rallies Into Resistance

The US dollar has shown itself to be resilient during the trading session, breaking above the ¥106.50 level, but this is an area that has been resistance in the past so I would not be surprised at all to see this market rollover and start going towards the lows again. Quite frankly, this market continues to make “lower highs”, and therefore it makes sense that we continue to drop. Quite frankly, the pair has seen a lot of choppiness as of late, but at the end of the day this is a fight between a couple of central banks that are doing everything they can to loosen monetary policy. When I look at this chart, I recognize that we are essentially in a range between the ¥105 level underneath and the ¥107 level above.

USD/JPY Video 07.09.20

Looking at the chart, I think that we continue to grind lower and it almost looks as if we are starting to find the market setting up for a descending triangle. If that is going to be the case, then it is very likely that we see a bit of a grind it back and forth making lower highs, and then eventually breaking through the ¥105 level. That is obviously a large, round, psychologically significant figure, but at this point I think it is only a matter of time before we break down through that region. If and when we do, you can expect a huge fight when it comes to this pair, and I think we will continue to see a lot of volatility underneath there as well. This is most recently seen a couple of weeks ago, when we shot straight up in the air from there.

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