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USD/JPY Price Forecast – US Dollar Rallies Into Resistance

By:
Christopher Lewis
Updated: Dec 26, 2019, 17:00 UTC

The US dollar has rallied a bit during the trading session on Thursday as traders came back from the Christmas holiday. Ultimately, the market looks as if it is trying to break out and more of a “risk on” type of trade.

USD/JPY Price Forecast - US Dollar Rallies Into Resistance

The US dollar has rallied a bit during the trading session on Thursday, reaching towards the ¥110 level, an area that will have a certain amount of psychological resistance built into it. If we can break that level, then it’s likely that we go looking to fill the gap at the ¥111 level, and then eventually the ¥112.50 level which is the 100% Fibonacci retracement level. We are trying to break out for a bigger move based upon a “risk on” appetite, and I do think that happens given enough time due to the fact that other risk related currency pairs are starting to show the same thing.

USD/JPY Video 27.12.19

We are recently crossed the 50 day EMA above the 200 day EMA, showing signs of bullish pressure as it is a “golden cross” be informed. That is a longer-term “buy-and-hold signal”, and therefore I like the idea of hanging on for a longer-term move above the ¥110 level and it’s difficult to see what happens between now and New Year’s Day other than a lot of erratic and thin trading. Pullbacks at this point should continue to find plenty of support underneath, initially at the ¥109.15 level, and then the ¥108.50 level.

I do look at this as a market that you should be looking for value on pullbacks. I don’t have any interest in shorting, until we break down below the ¥108 level, which would be very difficult to do in the short term, barring some type of horrific headlines coming out of the US/China trade situation.

Please let us know what you think in the comments below

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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