USD/JPY Weekly Price Forecast – US Dollar Gives Back Some Gains Finally
The US dollar has initially tried to rally during the course of the week but gave back the gains to show signs of hesitation. The market had gotten far overdone at this point, with the ¥115 level being a major barrier. If we can break above there, then it would obviously be a huge victory for the US dollar, or perhaps more to the point, a huge loss for the Japanese yen. After all, the Japanese yen has been sold off against almost everything as of late. While I do not necessarily like buying this on a breakout right away, I would use it to play other currencies against the yen.
USD/JPY Video 25.10.21
The market continues to see a lot of noisy behavior, but quite frankly I think it is only a matter of time before buyers come back in and pick this market up. I suspect that the ¥112.50 level will be an area of interest, followed by the ¥110 level. It is not until we break down below the ¥110 level that I would be a seller. This is essentially far too gone to be buying, at least not without some type of pullback. The market needs to cool off because quite frankly markets cannot go in one direction forever.
That being said, I think we will get an opportunity given enough time, and then could take advantage of value as it appears. The recent explosion has had more to do with Japanese yen being used as a funding currency more than anything else. At this juncture, you need to be cautious but I think if you wait a few days to make it an opportunity to get long yet again.
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