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USD/JPY Price Forecast – US dollar rallies on Wednesday

By:
Christopher Lewis
Updated: Aug 30, 2018, 04:44 UTC

The US dollar rallied against the Japanese yen on Wednesday, in a bit of a “risk on” move. This was exacerbated by a stronger than anticipated GDP figure in America, which of course has the stock markets looking rather happy.

USD/JPY daily chart, August 30, 2018

The US dollar has rallied quite nicely during the trading session on Wednesday against the Japanese yen, something that typically happens in a “risk on” environment. By doing so, the market looks likely to continue to try to reach higher levels, but we are starting to run into a bit of noise at the ¥111.50 level. I think at this point; a short-term pullback is likely but it should be met with buying pressure again. To me, it looks as if there is a bit of a bottoming pattern at the ¥111 level, and if we can keep risk appetite healthy, it’s possible that the market will finally break out to the upside, clearing the 100 level ¥0.50 level and reaching towards ¥112 level. Remember, I’ve been talking for days about how this market seems to be going in 50 pips increments, and this hasn’t changed.

If we were to turn around and break below the ¥111 level, then the ¥110.50 level makes a lot of sense. Overall, this is a market that I think continues to see a lot of choppiness and noise, but at the end of the day when things start to focus on the interest rate differential again, the US dollar clearly is superior to the Japanese yen. If we can get less dramatic headlines around the world, the market will probably go back to that old adage of chasing interest rates. While it may take some time, I do believe that this market finds more buying pressure.

USD/JPY Video 30.08.18

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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