USD/JPY Weekly Price Forecast – US Dollar Pulls Back for the Week

The US dollar has initially tried to rally during the course of the week only to break back down. That being said, the market is likely to continue to go back and forth. All things been equal, this is a market that is trying to form some type of bullish flag, so that is a good sign, but you should also keep in mind that the risk appetite will have a certain amount of influence on this pair as well. Right now, it looks as if people are willing to take on a little bit of risk although it has been a bit noisy.

USD/JPY Video 24.05.21

The 200 week EMA sits at the 38.2% Fibonacci retracement region, so I think that of course will have its say as well. Longer-term, I think we are trying to rally but a lot of this comes down to bond yields more than anything else. As long as they continue to spread between the two nations, it could continue to push this pair higher.

To the upside, the ¥111 level is probably going to continue to see a lot of resistance, but if we were to break above there it is likely that we will continue to go towards the ¥115 level. On the other hand, if we turn around a break down below the 38.2% Fibonacci retracement level, we could see a little bit of negativity. Right now, I do not have any interest in shorting this pair, because although we did pullback from the highs, we are stabilizing and that of course is a good sign after having such an impulsive move to the upside.

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