USD/JPY Weekly Price Forecast – US Dollar Bounces Back Against Yen

The US dollar broke down significantly during the course of the week but found support near the 160 and level to form a hammer. At this point in time, the hammer of course suggests that there is bullish pressure underneath, but I would also point out that the ¥107 level was previous resistance so while we may get a bit of a bounce, there are a lot of concerns for buyers to the upside.

USD/JPY Video 11.05.20

If the market breaks down below the hammer for the week, then it sends the market down towards the ¥105 level. At this point, if the market breaks above the ¥107 level it is likely that we will run into a lot of resistance as well. However, if we wipe out the candlestick from the previous week, then it is possible that we could continue to go towards the ¥109 level. All things being equal, this is a pair that probably continue to drift lower eventually, even though we get a little bit of a short-term bounce. After all, the pair does tend to break down significantly over the longer term when it comes to economic concerns like we have going on right now.

Ultimately, this is a market that has been very choppy over the last month or so, and I think that will probably continue as markets go back and forth debating whether or not the economy is going to pick up. At this point, the market is probably a “fade the rally” type of situation but I would more than likely do not the daily chart and not the weekly chart as it is far too tight to have a good risk to reward ratio.