USD/JPY Weekly Price Forecast – US dollar pulls back against Japanese yen

The US dollar has fallen during the week, crashing into the ¥112 level. This is a market that had formed a shooting star during the previous week, so it makes sense that we would see a bit of hesitation to go even further. I think that the uptrend line underneath also offers a lot of support, so I think it’s only a matter of time before the buyers come in and pick up the US dollar. The interest rate differential of course favors the US dollar, so don’t forget that.

I believe at this point it’s likely that the market will eventually turn around and try to go towards the ¥114.50 level again, but we may need to pull back a little bit further to build up the necessary momentum. Once we do break that momentum, then I think we could reach towards the ¥115 level, and perhaps even further than that. The question now remains as to whether we can get enough good “risk on” behavior to warrant that move. If we turn around and break down below the ¥110 level, we could accelerate to the downside rather rapidly. Stock markets have been very shaky to say the least, and that of course has done no favors for this pair. When I look at this chart, it looks very bullish, but we may have more pain ahead for the buyers over the next couple of sessions, if not a couple of weeks.

USD/JPY Video 15.10.18