USD/JPY Price Forecast – US dollar struggles to keep gains

The US dollar try to rally initially during the day on Tuesday but found enough resistance near the ¥109 level to turn somewhat negative, as it looks like we have a real fight on our hands. I think we may see a bit of sideways action in the short term, as the market awaits the results of the US/China trade talks. Because of this, it’s very likely that the market participants will continue to be jittery, and very sensitive to headlines risks.

USD/JPY Video 09.01.19

If we can break above the ¥109 level decidedly, then I think the next major barrier is going to be found near the ¥110 level, which I do not expect this market to be able to overcome. We have recently rolled over rather decidedly, and have even formed a “death cross”, which is when the 50 day EMA crosses below the 200 day EMA. At this point, I believe that the Japanese yen will continue to strengthen this year, and this is the beginning salvo in that move. I am more than willing to sell this market, but quite frankly I would love to have an opportunity to do it closer to the ¥110 level. However, if we break the ¥108 level at this point, I’d be forced to start selling there as well. I have a target of ¥106, followed by the ¥105 level after that. Expect volatility, but I certainly think negativity will be the longer-term move.