USD/JPY Price Forecast – US dollar strengthens

The US dollar has rallied a bit during the trading session on Monday against the Japanese yen, bouncing from the 50 EMA on the hourly chart, and of course attempting to reach towards the vital ¥111 level. That would be a major turn of events for the US dollar against the Japanese yen, which ironically tends to move on to risk appetite, but right now I think it has more to do with US dollar strengthen overall as we worry about trade tensions between the Chinese and the Americans.

Friday is the deadline for trade tariffs, and it looks likely that we are in fact going to continue to see more tariffs against the Chinese, which of course will be retaliated against, meaning that the trade war is going to step up in its intensity. People were very concerned about this, so will throw a lot of volatility and of the currency markets, but right now it looks as if the US dollar is winning that argument. If we can break above the ¥111 level, then the market will have cleared a major resistance barrier, and it should continue to go towards the ¥112.50 level after that. In the meantime, short-term pullbacks would more than likely be buying opportunities unless we can break down below the ¥110.50 level, which should send the market much lower, at least in the short term. Expect a massive amount of volatility in this pair, but that’s nothing new in times like these.

USD/JPY Video 03.07.18