USD/JPY Weekly Price Forecast – US Dollar Sideways Against Yen

The US dollar has gone back and forth against the Japanese yen as we continue to struggle to break down below the ¥104 level. If we can break down below the bottom of the candlestick from the past two weeks, then it is likely that we drop to the ¥103.25 level, and then perhaps even down to the ¥102 level. Rallies will be sold into, and the ¥105 level looks to be massive resistance. If we were to break above, there then you could start to see a potential turnaround but right now it is obvious to me that we simply do not have the momentum to make that happen.

USD/JPY Video 07.12.20

Remember that this pair is highly sensitive to risk appetite, but at the same time the Federal Reserve is flooding the market with dollars so it is possible that we could see this pair drop. The candlestick formation for the last couple weeks certainly shows that the buyers cannot seem to pick the market out, but at the same time we cannot seem to break down. If we were to turn around a break above the ¥105 level, then we could be looking at a move towards the ¥107.50 level that obviously would take a lot of work to get there.

This is a market that has been in a downtrend for some time, so it makes quite a bit of sense that we should see some continuation. However, the market is at extreme lows, so I think that is part of what we are wrestling with here. All things being equal, you probably need to see some type of break in one direction or the other the put money to work for a longer-term move. Right now, it does not seem as if the market has any drive to make a bigger move.

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