USD/JPY Price Forecast – US dollar recovers after initially selling off against yen

The US dollar has initially broken down against the Japanese yen during trading on Monday but turned around to show signs of life again. By doing so, the market is likely to continue to press up against the resistance just above. The ¥109 level is an area that has caused a bit of resistance, most recently seen against the Japanese yen. By doing so, we rolled over to form a bit of a shooting star. That of course is a negative sign but if we can break above the top of that shooting star in the round figure, it does in fact open the door to a bigger move.

USD/JPY Video 30.07.19

As long as we stay below there though, it’s likely that we will continue to chop around and grind sideways. The 50 day EMA is sitting just below, so that should offer a bit of support. Even if we were to break down below there I think that the ¥108 level also offers another area where buyers could step in and try to pick this pair up.

Ironically, the Federal Reserve cutting interest rates this week and perhaps sounding very soft could be the very catalyst for the US dollar to pick up strength against the Japanese yen. This is because this pair tends to follow right along with stock markets in general. If stock markets get a boost from liquidity, that should then help this pair try to break out to the upside going forward. At this point, I do believe there is mounting support underneath.

Please let us know what you think in the comments below