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USD/JPY Weekly Price Forecast – US dollar bounces for the week

By:
Christopher Lewis
Updated: Nov 2, 2018, 20:21 UTC

The US dollar bounced during the week, breaking the top of a couple of hammers on the weekly chart against the Japanese yen, and a purely technically driven move. With the jobs number coming out on Friday hotter than anticipated, we have seen a little bit of strength as well which of course makes sense.

USD/JPY Midday daily chart, November 05, 2018

The US dollar has rallied against the Japanese yen during the week, breaking above the ¥113 level at one point. We are starting to get back a little bit of the gains as we approach the weekend, but that’s not overly surprising. I believe that the ¥114.50 level above begins significant resistance that extends to the ¥150 level, so it is going to take quite a bit of momentum to finally break above that level, which I do think we will eventually try. I also believe that there will be multiple attempts at breaking out, which of course will take quite a bit of effort.

USD/JPY Video 05.11.18

If we did break down below the ¥112 level, the market will probably unwind towards the ¥111 level. After that, I think the ¥110 level is even more supportive, so I would be even more interested in buying that level. Ultimately, this is a market that tends to move on interest rate differentials as well as risk appetite, so I think given enough time the underlying strength of the US dollar an interest rate differential between the United states and Japan will continue to propel this market to the upside.

Ultimately, this is a market that will continue to grind to the upside, and you should keep in mind that the word grind is crucial. Although I believe in the bullish pressure, I’m not looking for major gains in short bursts.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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