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USD/JPY Weekly Price Forecast – US dollar struggles for the week

By:
Christopher Lewis
Updated: May 10, 2019, 17:34 UTC

The US dollar gapped lower to kick off the week on Monday as tensions between the Americans and Chinese continue to flareup. That being the case, we reached all the way down to major support.

USD/JPY weekly chart, May 13, 2019

The US dollar has gapped lower to kick off the week and then reached down towards the 109.70 level by the time mid Friday came around. That being the case, it looks as if the market is trying to hedge its bets ahead of any announcement between the Americans and the Chinese, which at this point could go in either direction. With that in mind, I will offer analysis for both scenarios, as we have no idea when any type of news will come out.

USD/JPY Video 13.05.19

Basically, the way the markets behave for the next candle is going to be more or less a coin toss. If we break down below the ¥109 level, it’s very likely that we will go looking towards the ¥108 level. This will probably coincide with bad news out of the trade talks, as the Japanese yen will be the safety currency of choice in that scenario. Having said that, there’s also the opposite scenario where the talks produce something substantial, and if they do it’s likely that we could fill the gap above.

Unfortunately, this is a market that is going to be difficult to get a grip on ahead of time, because this is literally going to come down to two things: what the announcement says from the US/China trade talks, and what the market thinks about it. One thing you should make sure that you do is keep your risk under control, meaning keep your position size relatively small as we could see extreme moves and quite suddenly.

Please let us know what you think in the comments below

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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