USD/JPY Price Forecast – US dollar under pressure early Tuesday

The US dollar initially was going sideways during the day on Tuesday but found the little bit of pressure during the European session, reaching down to the ¥113.50 level, before bouncing again. This is a market that is still very much in and uptrend, so I don’t have any interest in shorting it and I realize that we will continue to see a lot of volatility but quite frankly I think there is plenty of value to be found at lower levels. This is especially true when you look at the overall proclivity of the market being so bullish. We may be a bit overextended, so this is just simply an opportunity to let the market come back to you and offer a better price. With that in mind, I think that the market very well could pull back towards the ¥113.50 level again, and then perhaps even the ¥113 level after that, both of which could offer a bit of support.

I recognize that there is a major resistance above at the ¥114.50 level, extending to the ¥115 level, so a pullback to build up the necessary momentum also makes sense from that point of view. Either way, the interest rate differential between the economies will continue to demand that the US dollar goes higher over the longer-term, and I think that will continue to be what we see. At this point though, simply waiting for the market to offer a bit of value is probably the prudent thing to do as the rally is already starting to show signs of failing as the American step on board.

USD/JPY Video 03.10.18