USD/JPY Weekly Price Forecast – US Dollar Gets Crushed Against Japanese Yen For The Week
The US dollar has broken down significantly against the Japanese yen during the week as the stock markets in New York have been crushed in ways that we haven’t seen since the financial crisis. At this point, we are testing the ¥108 region, which should be supportive. If the market breaks down below there it’s likely to go towards the ¥105 level over the longer term. That being said, we could get a bit of a bounce and go looking towards the ¥110 level above. That is essentially “fair value” for the overall consolidation.
USD/JPY Video 02.03.20
The overall consolidation runs from ¥115 to the upside down to the ¥105 level on the downside. Based upon this candlestick, I do think it’s more likely that we go looking towards the downside but don’t be surprised at all if we see some type of short-term bounce in the process. If we were to break down below the ¥105 level, it would be crucial at that point and we would probably see this market drop down to the ¥100 level, an area that has traditionally caught the attention of the Bank of Japan. To the upside, if the market was to take out the highs of the week, that would obviously be a very bullish sign, but I give that about a 5% chance of happening anytime soon. This is a market that you should be looking for opportunities to sell after bounces, but you may have to do so from shorter-term timeframe such as the daily or the four hour charts.
This article was originally posted on FX Empire
