USD/JPY Weekly Price Forecast – US Dollar Continues to Dance Around Japanese Yen

The US dollar has rallied significantly during the week, breaking above the ¥107 level rather handily. In fact, the market reached as high as the ¥108 level before pulling back somewhat. We are closing out the week just above the ¥107 level, but I do not like the look of this candlestick in reference to all of the bullish pressure that typically accompanies a hammer being broken to the upside. The ¥107 level of course is a major round figure, as it is an area that has caused both support and resistance. The fact that the market broke above there was a good sign but quite frankly not hanging onto the gains does not help the situation. At this point in time, the market is likely to see a lot of back and forth, but I believe signs of exhaustion will continue to attract a lot of attention.

USD/JPY Video 18.05.20

To the downside, the ¥105 level is an area that will be greatly scrutinized, as it is a major support level. It is also the bottom of the larger consolidation area, so having said that it is likely that the market will be very noisy, as both of these are considered to be safety currencies and therefore, they tend to fight each other. However, the Japanese yen is considered to be “safer” than the US dollar when it comes to the risk appetite of the Forex community, so it could cause a bit of downward pressure. Rallies are to be sold into, unless of course we somehow break above the ¥109 level, which is very unlikely, then the market is likely to go much higher.

The US dollar has gone back and forth during the course of the week against the Japanese yen. The ¥107 level of course is a major round figure, as it is an area that has caused both support and resistance. The fact that the market broke above there was a good sign but quite frankly not hanging onto the gains does not help the situation.