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USD/JPY Price Forecast – US dollar pulls back from ¥113

The US dollar initially tried to rally during the day again on Wednesday but has found the ¥113 level to be a bit too expensive. That being the case, the pullback started as soon as the Americans came on board, and quite frankly I think in the end this will be a healthy sign, as we had gotten ahead of ourselves.

The US dollar has rallied again against the Japanese yen only to turn around at the ¥113 level. The market has gotten rather expensive, but I think at this point it’s likely that we will continue to see buyers underneath, as we certainly have a nice strong uptrend going. I believe that the pullback will be brutal, but at the end of the day I also see a lot of support somewhere near the ¥112 level. Between here and there, I would anticipate some type of bounce are supportive candle that we can take advantage of, and certainly would do so as soon as I got the chance. I believe that the market will eventually go looking towards the ¥114 level, an area that extends to the ¥115 level, and will be difficult to overcome. However, I think longer-term fundamentals demand that the US dollar goes higher against the Japanese yen, as the interest rate differential between the two are going to widen, not shrink.

There of course is the possibility of a safety bid towards the Japanese yen if something happens, but at this point it looks as if the market is willing to overlook a lot of things and continue to grind to the upside. Stock markets have their influence obviously, so pay attention to them as well. As a general rule, I follow the S&P 500 and marry it to any trade.

USD/JPY Video 19.07.18

This article was originally posted on FX Empire

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