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USD/JPY Weekly Price Forecast – Conflicting Candlesticks Show Consolidation

Christopher Lewis
·2 mins read

The US dollar has initially fallen during most of the week to reach down towards the ¥105 level again. This is an area that has been supportive in the past, and now that we have recaptured it is likely that we are going to see a lot of choppiness, especially considering that the market looks a little bit like it is forming a hammer during the week, just as the previous week formed a bit of an inverted hammer, showing that we are going back and forth.

USD/JPY Video 19.10.20

Looking at this chart, if we can break down below the ¥105 level it is likely that we go down towards the ¥104 level. A breakdown below there then opens up the possibility of a move down to ¥102. Ultimately, this is a market that is moving on a couple of different reasons, not the least of which would be the stimulus package coming out the United States is probably going to be huge, and of course Japanese bonds are paying more in interest than American ones are, which is a complete surprise based upon historical norms.

That being said, I do think that there is plenty of resistance above, but we are in a relatively tight market, so it is probably going to continue to be short-term based more than anything else. I do favor the downside in general, but I also recognize that it might be a bit quiet between now and the presidential election as well as many other potential economic announcements. Looking at this chart, we have been grinding lower for quite some time and quite frankly nothing has changed.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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