USD/JPY Weekly Price Forecast – US Dollar Continues to Hover Around ¥110

The US dollar initially rallied during the course of the week but pulled back just a bit to form a bit of a shooting star. The market seems to be hanging around the ¥110 level, and therefore I think that the market will continue to see a lot of back and forth action still, as we are in the dead of summer and quite frankly the summertime tends to be a very quiet time of the year.

USD/JPY Video 16.08.21

The 50 week EMA is getting ready to cross above the 200 week EMA, but I would not get too excited about it due to the fact that the market looks to be consolidating in a larger area. If we were to break down below the ¥109 level, then we could go looking towards the ¥107.50 level, which would more than likely signify some type of bigger “risk off move” in the markets overall. On the other hand, if we were to break above the ¥112 level, then that would be a very bullish sign as it is an area that has been difficult to overcome for a few years.

Nonetheless, I think in the short term we are going to struggle to have any type of clarity and that might be the way things go for a while. After all, there is a huge debate between inflation and deflation, and therefore it is difficult to imagine where we are going to get clarity at the moment. Eventually, the bond market will lead the way but right now it seems to be just as confused as everybody else.

For a look at all of today’s economic events, check out our economic calendar.