USD/JPY Weekly Price Forecast – US Dollar Skyrocketed Against Japanese Yen
The US dollar has skyrocketed against the Japanese yen during the course of the trading week, to threaten the crucial ¥114.50 region. If we can break above the ¥115 level, this market then becomes a massive “buy-and-hold” situation, but this is a market that I think continues to see a lot of erratic behavior. Quite frankly, with the interest rate differential widening between the United States and Japan, it makes quite a bit of sense that we would continue to see this. That being said, it is not necessarily going to be easy to simply slice through the ¥115 level, at least I hope not. Quite frankly, we have gotten so overdone at this point that I would prefer to find a little bit of a pullback in order to pick up value.
USD/JPY Video 18.10.21
To the downside, if we were to break down below the ¥112.50 level, it would more than likely signify that we are unlikely to break out anytime soon. The ¥110 level underneath would be support as well, and if we were to somehow break down below there, it is likely that this entire thing would fall apart. That is very unlikely though, not after this type of move. Quite frankly, these moves tend to lead to continuation. Nonetheless, I need to see a pullback before you put any real trading capital work. I will not chase this trade, because it would be a really good way to lose money. If we do break out above the ¥115 level, then you need to look for underperforming currencies against the yen in order to take advantage of those moves, something like the AUD/JPY pair as this would show just how weak the Japanese yen is.
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