USD/JPY Weekly Price Forecast – US Dollar Breaks the ¥107 Level

The US dollar has broken down a bit during the week, slicing through the ¥107 level. By doing so, it shows that the market still shows a lot of weakness, and at this point it is likely that if we drop from here, we should go as low as the ¥105.50 level, possibly even the ¥105 level after that. On the other hand, if we turn around and break above the top of the weekly candlestick, it is likely that the market will then continue to go towards the ¥108.50 level, possibly even the ¥109 level after that.

USD/JPY Video 04.05.20

This pair is highly sensitive to risk appetite, but we also have the fact that the Federal Reserve is trying to do everything in its power to work against the value of the US dollar, as debt around the world is typically denominated in that currency, meaning that there is a shortage of US dollars in general. With that being the case, it is highly likely that the pair will rise or fall right along with the US dollar against other currencies. Typically, this pair moves up and down with the S&P 500, but the dynamics have changed as of late and it seems to be more or less what is going on with the dollar that is driving this pair more than anything else. That being said, I believe that the market continues to find a lot of noise ahead, and it is worth paying attention to which direction we break out of this candlestick.