USD/JPY Weekly Price Forecast – the US dollar collapses against Japanese yen

The US dollar initially rallied during the week against the Japanese yen but got absolutely hammered in the last couple of days. With that, we have broken through support underneath to drive this market below the ¥170 level, perhaps reaching down to the ¥105 level after that. That’s a level that coincides quite nicely with the 100% Fibonacci retracement level so I think at this point it makes quite a bit of sense. As long as we have major headwinds out there, it makes sense that the pair continues to go a little bit lower.

USD/JPY Video 05.08.19

Ultimately, if we continue to see so much uncertainty, it’s likely that the Japanese yen will continue to pick up strength against most currencies out there, and of course the US dollar isn’t going to be any different. Overall, I believe that this is a scenario where people are starting to run for cover finally, as we have been ignoring a lot of bad negative economic news for quite some time. Looking at this chart, if we were to turn around to wipeout this candlestick it would be bullish but I think it’s very obvious that the trend is starting to become even more negative, so at this point it’s very likely that short-term rallies will be faded, and of course we will take advantage of that as it happens. Even though the US dollar will strengthen against most currencies, the Japanese yen will course be an outlier as it is where people run for safety first.

Please let us know what you think in the comments below