USD/JPY Weekly Forecast – US dollar rallies hard for week

The US dollar initially pulled back during the week, but then skyrocketed towards the ¥112 level. By doing so, the market ended up slamming into what now looks to be major resistance. The ¥112 level has been important more than once, so it’s not a surprise that we stopped here. However, if we can break above here the market could find itself reaching towards ¥113.50 rather quickly. On the other hand, we could very easily pull back which wouldn’t be a huge surprise either, with major support showing itself at ¥111.

USD/JPY Video 11.03.19

This market will move right along with the S&P 500 in general, but obviously there are a lot of geopolitical concerns when it comes to global markets right now, and this pair does tend to be rather sensitive to headlines, especially when you are talking about things related to trade. This of course brings up the idea of the US/China trade deal, which I think the markets have priced in as being a “done deal” overall. With that in mind, it’s very likely that this pair will remain volatile.

Either way, longer-term traders seem to be betting on a return to the absolute breakdown, but that’s not to say we won’t get major pullbacks occasionally. It is because of that you should probably be cautious about your size, especially considering that the greenback has lost some of its luster as of late, barring what the ECB has done.

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