USD/JPY Price Forecast – US Dollar Testing Major ResistanceThe US dollar has reached towards major resistance above, that extends all the way to the ¥110 level. At this point, the market might be a bit stretched, so a pullback is likely.
The US dollar has rallied a bit during the trading session on Friday, reaching towards the ¥109.60 level, but there is a significant amount of resistance just above that will come into play. The ¥110 level is a major barrier, which obviously has been on the mind of traders for quite some time, as we continue to slam up into that area but cannot break out. Because of this, if we were to break above the ¥110 level it would be a major event that should send this market much higher. Ultimately though, it does not look like we are ready to do that and certainly will be able to do that after the massive turnaround that we have seen. Quite frankly, momentum doesn’t work like that in Forex very often.
USD/JPY Video 13.01.20
A pullback does make quite a bit of a sense, but I’m not necessarily saying that we can’t break out, it’s just that we won’t be doing that today. If we did though, we would probably go looking towards the ¥111 level next, which is the scene of a major gap, that extends all the way to the ¥112.50 level. To the downside, I would anticipate that the ¥108 level should be massive support, so at that point I would probably be a buyer. Keep in mind that this pair is highly sensitive to risk appetite so one should pay attention to how that is going around the world. Stock market correlation still holds, so that does help but at the same time it doesn’t look as if we have the necessary momentum to go higher quite yet.
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