USD/JPY Weekly Price Forecast – US Dollar Continue Showing WeaknessThe US dollar initially tried to rally during the week but gave back a ton of the gains on Friday. This ended up forming a rather ugly candlestick.
The US dollar has initially tried to rally against the Japanese yen, but gave back quite a bit of the gains, especially on Friday. Ultimately, this is a market that I think is going to continue to struggle to find its footing, mainly because the Federal Reserve has come out and said that it is going to raise the bar for raising interest rates. In other words, the US dollar is likely to be in trouble for quite some time.
As long as that is going to be the case, I am very interested in shorting the US dollar, but I also recognize that the Bank of Japan is not much better right now. With that being the case, I believe that we are looking at a scenario where one can short the US dollar every time it rallies.
USD/JPY Video 31.08.20
If we do break down below the ¥104.50 level, then it may open up a major “dump in the market” down towards the ¥102 level. To the upside, it is not until we break above the dashed line that I have on the chart at the ¥107.50 level that I even entertain the idea of buying the greenback against the yen. It is going to be difficult for longer-term traders to play this market, so my suspicion is that most of the trading in this market is going to be from short-term traders looking to take advantage.
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