USD/JPY Weekly Price Forecast – US dollar mixed during the week against yen

The US dollar has been back and forth against the Japanese yen during the week, as we have had a lot of moving pieces to digest. Ultimately, we are settling near the ¥109 level, which has been important more than once.
Christopher Lewis
USD/JPY weekly chart, February 04, 2019

The US dollar has gone back and forth during the week, testing the ¥110 level above as resistance, and the ¥108 level underneath. This is a market that continues to see a lot of volatility but that makes a lot of sense as the Federal Reserve has changed its stance about rate policy and overall balance sheet policy quite a bit. Beyond that, the Japanese yen of course is a safety currency that people will run to in times of trouble, so it’s likely that we get a lot of back and forth type of pressure because of stock markets. On one hand, the US dollar has been losing strength, but on the other, she got markets have been rallying which is typically good for this market.

USD/JPY Video 04.02.19

On Friday, we received word that the January jobs report was an addition of over 300,000 people to the payroll, which of course is very bullish for risk appetite. Because of this, I think that the market will continue to go back and forth, in a somewhat undecided pattern. However, if we break down below the ¥108 level, then the market is free to go down to the ¥107 level, and then eventually the ¥105 level. Alternately, if we were to turn on a break above the 61.8% Fibonacci retracement level, which is substantively the ¥110 level, then the market could make a move towards the ¥111.50 level after that. One thing I think is for sure, we are going to see a lot of volatility.

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