USD/JPY Weekly Price Forecast – US Dollar Continues to Go Back and Forth

The US dollar has gone back and forth during the course of the trading week, as we are at an area that seems to be offering significant resistance. Furthermore, the ¥115 level has historical precedence as being important, so if we can break above the level, then I think this continues to be more or less a buy-and-hold type of situation. In the short term though, it looks as if the ¥115 level is going to take a lot of effort to get above. Quite frankly, we need to see major gains in interest rates to make that happen. With the Federal Reserve looking to taper, it is very possible that we could see that happen.

USD/JPY Video 08.11.21

To the downside, the ¥112.50 level should offer a significant amount of support, but even if we break down below there, I think that the ¥110 level is an even bigger support level. Quite frankly, as long as we stay above the ¥110 level, this is more or less going to be a “buy on the dips” type of situation until we finally get that breakout. When you look at the daily chart, you can see that we are forming a flag, although on the weekly it is not as prevalent or obvious. Either way, we are trying to work off all of this massive amount of froth, and perhaps enter the more normal type of action you get when there is a lot of “risk on” behavior around the market. Remember, the Japanese yen is considered to be the “safety currency” that a lot of people run towards.

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