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USD/JPY Weekly Price Forecast – US Dollar Reverses Initial Losses for The Week

By:
Christopher Lewis
Published: Aug 6, 2021, 14:59 UTC

The US dollar fell significantly during the early part of the week against the Japanese yen but has turned around completely to form a very bullish looking candlestick.

USD/JPY Weekly Price Forecast – US Dollar Reverses Initial Losses for The Week

In this article:

The US dollar initially fell during the course of the week to reach down towards the ¥108.50 level before turning around quite drastically to break above the ¥110 level. This is a very bullish sign and does suggest in fact that the pair is going to try to test the highs again. Keep in mind that there is a massive amount of resistance just above there, so while this could break out to the upside, the reality is that I tend use this pair as an indicator as it is much choppier than some of the other yen related pairs. I anticipate that this market will probably continue to bounce around between the ¥108.50 level, and the ¥111.50 level.

USD/JPY Video 09.08.21

Keep in mind that this pair is highly sensitive to risk appetite, as the market continues to see a lot of back and forth when it comes to risk appetite, it will continue to cause choppy behavior. I do like the idea of buying dips until we break down below the ¥180.50 level, but as far as a longer-term “buy-and-hold” type of position is concerned, I think it is going to be a bit difficult for this pair to provide that.

That is why if it continues to rise over the longer term, I will probably be buying other yen related pairs much more heavily, such as the GBP/JPY pair, NZD/JPY pair, and so on. Keep in mind that interest rates also have a lot to do with what happens here, so if interest rates rise in America that might be reason enough to have this pair go higher.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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