USD/JPY Price Forecast – US Dollar Stalls At Major Round FigureThe US dollar has tried to rally during most of the trading session on Tuesday but gave back the gains as the ¥110 level is attracting far too much in the way of resistance in an overbought condition.
The US dollar has run into a bit of a brick wall at the ¥110 level, which is an area that has been crucial for the markets to pay attention to anyway, so it’s not a huge surprise to see the market stall a bit. Furthermore, we had been overbought for the last couple of days, so I don’t find it overly surprising that we are failing to take this level out. If that’s going to be the case, then a short-term pullback makes quite a bit of sense. At this point, I believe that the market will eventually break out but it’s very likely that the short-term pullback coming is simply going to be a nice buying opportunity. I don’t is certainly one to short this market, but I do recognize that I could probably get a better price at the first signs of trouble.
USD/JPY Video 15.01.20
I believe that the ¥109.50 level underneath will offer plenty of support, as it was previous resistance. Alternately, if we were to break above the top of the shooting star, then the market is very likely to go racing towards the ¥111 level. Beyond that, the market then could go looking towards the ¥112.50 level, but that is a longer-term call, not something that I would be looking to see happen anytime soon. Remember that this pair is highly sensitive to risk appetite so pay attention to how that goes as far as stock markets are concerned. This isn’t necessarily a negative thing, it’s just that the market is running out of momentum at a major level after rocketing to the upside.
Please let us know what you think in the comments below