USD/JPY Price Forecast – US dollar rallies on Tuesday sessionThe US dollar rallied significantly during the Tuesday session, reaching towards the ¥112.25 level initially. There is a major downtrend line just above though, so I think it may be difficult for the market to go much further without some type of pullback.
The US dollar has rallied against the Japanese yen during the trading session on Tuesday, pulled back a bit, and then rallied right back up to the highs. This is a bullish sign, and I think it suggests that we are eventually going to break out of the massive symmetrical triangle that we have been in for some time. However, it doesn’t mean that it’s going to be easy and it will almost certainly take significant effort to do so. Because of this, I believe that the market will eventually go to much higher levels but it may be quite noisy in the meantime. With that in mind, I would be looking to pick up value based upon short-term pullbacks more than anything else right now. I believe that this market will continue to move right along with the stock market, which looks noisy to say the least, but overall has been positive for some time.
I believe that this market is still very short term focus though, so keep that in mind. I would anticipate significant back-and-forth action, and it seems to be attracted to 50 pips increments. Because of this, I am a firm believer in staying in short-term charts and of course using small position size. I think this could change given enough time, but right now it looks as if we are still so noisy and so congested that it’s good to be difficult to get any real clarity in the short term.