USD/JPY Weekly Price Forecast – Us Dollar Drift Lower for the Week

During the past week the US dollar has tried to rally against the Japanese yen but as you can see on the chart, it looks as if we are giving up almost all of the gains. With that being the case, the market is likely to continue to see selling pressure on rallies, something that could be indicative of either a lack of momentum, or a potential turnaround. After all, the ¥115 level has been crucial for quite some time, and therefore if we were to test that area again, one would have to assume there will be sellers. A break above the ¥115 level then offers more of a “buy-and-hold” type of trade. This is something that I do not anticipate seeing between now and the end of the year.

USD/JPY Video 20.12.21

On the other hand, if we were to break down below the ¥112.50 level, it could open up a move down towards the ¥110 level. The ¥110 level should be somewhat supportive, as it is an area where we have seen a lot of noise in the past. The ¥110 level will obviously attract a lot of attention from a psychological standpoint as well. With this being said, the market is likely to find plenty of buyers in that area. Keep in mind that this pair is highly sensitive to risk appetite, so it rises as risk appetite rises. On the other hand, it also falls as risk appetite falls, so pay attention to indices around the world, commodity markets, and the like to see whether or not traders are willing to put a bunch of money to work.

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