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

The US dollar has broken down during the week, but more importantly after the Americans killed an Iranian general in Baghdad. That of course had more of a “risk off” feel to it, as the Japanese yen is considered to be one of the safest currencies.
Christopher Lewis
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.

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