USD/JPY Weekly Price Forecast – US Dollar Pulled Back Against Japanese Yen In Safety Play

The US dollar broke down significantly during the week, slicing towards the ¥108 level. That is an area that has caused a lot of support in the past, and so far, we have held that level. That being said, we are still at the very bottom of a larger consolidation area, which is relatively strong considering that we have had an assassination, and that of course should have been a massive “risk off event”, sending markets into a tailspin. While we did break down, we held our own and that of course is a bullish sign.

USD/JPY Video 06.01.20

Because of this I anticipate that the market will probably bounce from here and show signs of life. That being said, I’m not necessarily looking for a breakout either, but I recognize that a reversion to the mean may make some sense. If we were to break above the 200 week EMA, the black EMA on the chart, then I would be looking for the ¥112 level given enough time. Ultimately, this is a market that I think continues to see a lot of volatility but that’s nothing new when it comes to the Japanese yen anyway. With that, I like the idea of buying as long as we can stay above the ¥107.90 level, but if we were to break down below there then I think we probably go looking towards the ¥106.50 level. With that being the case, this is a market that could offer some intriguing possibilities as traders are finally coming back from the holidays on Monday.

Please let us know what you think in the comments below