USD/JPY Weekly Price Forecast – US Dollar Gives Up Early Gains for the Week

The US dollar initially tried to rally during the trading week, as we have broken above the ¥110 level yet again, only to turn around and fall. We have formed a shooting star for the fourth week in a row, and this tells me that given enough time we are very likely to pull back at this point. That does not mean that you can start shorting right away, but it is something that you need to be cognizant of. If we were to break down below the ¥109 level, that could open up fresh selling and send traders scurrying towards the safety of the Japanese yen.

USD/JPY Video 13.09.21

On the other hand, if we break above the ¥110.75 level, we might be able to go towards the ¥111 level, followed by the ¥112 level which has been massive resistance. The market remains rather choppy, and that tells me that both of these currencies are not necessarily favored at the moment. Nonetheless, if we get some type of major “risk off event”, that will send this pair lower. Stock markets falling sometimes can do the same thing for that matter.

Expect a lot of choppy and sideways action, and quite frankly you would be better off doing this on short-term charts than anything else. However, if we do break down below that ¥109 level, then I think the selling starts to accelerate in what could be thought of as a bit of a “rising wedge” on this chart. Nonetheless, you are going to need to let the market tell you where it wants to go next, and then simply follow.

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