USD/JPY Price Forecast – US Dollar Recovers Against Japanese Yen
The US dollar has pulled back a bit during the course of the trading session on Tuesday, but then turned around to show signs of strength again to form a bit of a hammer. The market looks as if it is trying to build a significant amount of pressure to finally break above the ¥115 level, and you can see that the Japanese yen is getting hammered across the Forex world, and therefore this is probably more about the yen than the dollar. In fact, the dollar has been very weak against most currencies during the day, so this shows just how poor the Japanese yen is performing.
USD/JPY Video 20.10.21
Underneath, I believe that the ¥112.50 level continues to be an area that will be important, and therefore I think it offers a bit of a floor on any type of move lower. Even if we break down below there, and it is really not until we break down below the ¥110 level that I would be a bit concerned about this market as it is clearly bullish, and the Japanese yen continues to be the favorite punching bag of most traders.
On the other hand, we could just turn around and break above the ¥115 level and continue going higher, but quite frankly this is a market that I believe would then go absolutely parabolic at that point. That being said, I do prefer buying pullbacks, because I do not like chasing trades which is exactly what that would be. Furthermore, it is also worth noting that there are some other Japanese yen related pairs out there that may have more momentum on the breakout than this one.
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