USD/JPY Price Forecast – US dollar rallies significantly against Japanese yen

The US dollar has pulled back initially during the day on Wednesday, only to turn things around and start rallying again. Ultimately, this is a market that has a significant amount of resistance above, just as it has a significant amount of support underneath. At this point, I think that it’s probably best to look at this as a range bound market between the ¥109.50 level on the bottom, and the ¥110.75 level on the top. Quite frankly, this market is moving on pure emotion and continues to be very difficult overall as we are worrying about trade sanctions and tariffs, and of course geopolitical concerns.

If things were left on their own, the interest rate differential would dictate that this market should go much higher. But at the same time we have a lot of concerns when it comes to US tariffs on China and vice versa. Beyond that, we now see the European Union and the Americans going after each other. This continues to put a lot of fear into the market and essentially make it “risk off.” That typically puts bearish pressure in this marketplace, so at this point I think there is a lot of confusion and it’s very difficult to be married to a position for any significant amount of time.

Until things change, expect a lot of back-and-forth and dangerous trading conditions. Small trading positions in a back-and-forth manner continue to be the best way to play this market, as there is no confidence in one direction or the other.

USD/JPY Video 28.06.18