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

The US dollar has gone back and forth during the course of the week against the Japanese yen, as we are hanging about the ¥110 this is an area that obviously would attract a lot of headline attention, and therefore it makes sense that we would see choppy behavior. Furthermore, we also have the questions about the Japanese economy, so therefore it makes sense that the yen has lost a little bit of value. Beyond that, we also have the US dollar strengthening overall, and we are seeing that across-the-board. That being said, keep in mind that this pair does have a significant risk on/risk off component built into it as well.

USD/JPY Video 19.07.21

At this point, I do believe that this pair probably false, as we are forming a bit of a “rising wedge”, which of course is fairly negative, so I think that if we break down below the ¥109 level, it is likely that we are going to continue to reach towards the 250 week EMA indicators, which means roughly ¥108. After that, the bottom falls out and we could go looking towards the ¥105 level. This would be a major “risk off” move, which quite frankly I am seeing some hints of it in the currency markets currently.

As far as going long is concerned, we need to get past the ¥112.50 level to have the “all clear” to go much higher. If that is the case, then I imagine this would be one of those situations where you hang on to the position for months, if not years. That seems highly unlikely at this point though.

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