USD/JPY Weekly Price Forecast – US Dollar Breaks DownThe US dollar has broken down significantly during the course of the week, showing the proclivity to drop through major support.
The USD/JPY pair has had a particularly rough week, grinding all the way down to the bottom of the hammer from a couple of months ago. The 104.25 region is massive support on the daily chart, and the bottom of that hammer. At this point in time it almost looks as if we are ready to simply plunge through there and continue going lower. This makes quite a bit of sense, because the US dollar has been week as of lately, but even more importantly for this pair is the fact that we are starting to see a lot of concern out there when it comes to risk appetite. That typically helps the Japanese yen in general.
USD/JPY Video 21.09.20
Rallies at this point will continue to be faded into, and therefore I am a seller at levels above. The ¥105 level could offer significant resistance and most certainly the ¥106 level will based upon what we have seen recently, so therefore I think that most traders will be looking to fade signs of exhaustion, perhaps entering off of the shorter-term charts.
To the downside, it is very likely that we could go looking towards the ¥102 level, possibly even the ¥101 level. The market has been grinding lower for some time, and now is finally starting to make some type of move. With this, I have no interest in buying this pair, it looks as if it is going to continue to struggle. Ultimately though, the closer we get to the ¥100 level, the more likely it is that the Bank of Japan starts to get involved.
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