USD/JPY Weekly Price Forecast – US Dollar Continues to Build Large Flag

The US dollar has been very noisy during the course of the week against the Japanese yen, reaching all the way down to the ¥112.50 region before turning around. At that point, the market is likely to continue seeing support, and the fact that we bounced does suggest that we are going to continue to try and build a bullish flag.

At this point in time, the market continues to see a lot of upward momentum, mainly due to the fact that we have the interest rates in the United States rising, while the Japanese interest rates continue to be very small. Because of this, I think it is probably only a matter of time before this market does break out, and if and when it does, it becomes more of a “buy-and-hold” situation above the ¥115 level.

USD/JPY Video 15.11.21

On the other hand, if we break down below the ¥112.50 level, then it is possible that we could go looking towards the ¥110 level underneath, where the 50 week EMA is starting to reach. For what it is worth, on the daily chart we also have the 200 day EMA in that area, so it all comes together quite nicely. You can also see that there was a significant cluster of trading in that area, so one would have to assume that there will be a significant amount of noise there that could also offer support. At this point, I have no interest in shorting this pair.

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