USD/JPY Price Forecast – US dollar continues to grind against Japanese yen
Remember, more than anything else this pair is highly sensitive to risk appetite and therefore you should be paying attention to stock markets. Rallies are starting to get a bit more difficult to come to, but it does look like we are trying to break out above to reach towards the ¥108 level, perhaps even the ¥109 level after that. Signs of exhaustion in that area should work against this pair, especially considering that the risk appetite out there is waxing and waning with headlines involving US/China, and of course Twitter.
USD/JPY Video 11.09.19
While we have broken out quite nicely, the reality is that the ¥109 level and the 200 day EMA both are going to cause quite a bit of trouble above. I believe that this is a countertrend bounce, and not necessarily something that you should jump in with both feet, unless there is some type of trade agreement between the Americans and Chinese that is sustainable. Right now, it doesn’t look like we are really that close to it, so I think at this point simply looking for signs of exhaustion to take advantage of and start selling will be the way to go going forward. That doesn’t mean we can’t rally for a couple of days, but I do think that will be a short-term phenomenon unless something structurally changes with the market. The meantime, I’m on the sidelines simply waiting for an opportunity to start shorting again but I do recognize short-term traders may take advantage of a grind to the upside.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
