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USD/JPY Price Forecast – US dollar continues to fall against Japanese yen

Christopher Lewis

The US dollar has been back and forth against the Japanese yen all day on Tuesday, reaching down towards the ¥105 level before bouncing towards the ¥105.60 level and then falling again. At this point, the market is very choppy but it does look like we are trying to break down and through the ¥105 level. If and when we do that, it could send this market much lower, with the initial target being the ¥102.50 level. After that, I suspect that we would then go to the ¥100 level underneath, which I believe would attract a lot of attention out of the Bank of Japan.

USD/JPY Video 14.08.19

All things being equal, I believe that the market is going to have plenty of sellers above on a bounce, so at this point I think that we are simply going to be waiting for signs of exhaustion to take advantage of. That being said, if we were to break down below the ¥105 level, the market could continue to go much lower and rapidly. I don’t really have a scenario in which I go long, unless we take out the ¥107 level, but even then I would be a bit surprised if we could go much higher. Ultimately, this market is a little bit overextended to the downside but it most certainly favor the downside as it is more of a “risk off” move to fall in this pair, which makes quite a bit of sense as there are so many major issues going on around the world right now.

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This article was originally posted on FX Empire

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