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USD/JPY Weekly Price Forecast – US dollar falls against Japanese yen

Christopher Lewis

The US dollar has initially rallied during the week but then turned around to show signs of weakness. At this point, the market has broken below the ¥107 level, but then popped back above it two days in a row. This shows that there is perhaps a certain amount of buying pressure just below, and of course the 50% Fibonacci retracement level has held as well. With that in mind, it’s likely that we could see a bullish candle stick or two ahead. This would coincide with a “risk on” move in the markets, but you will need to pay attention to a secondary market such as the S&P 500 to get confirmation.

USD/JPY Video 07.10.19

If the market was to break down below the bottom of the weekly candle stick, then it’s likely that the USD/JPY pair will go looking towards the ¥105 level underneath, which has been supportive previously. It’s obviously a large, round, psychologically significant number that will attract attention as well, so ultimately it makes a nice target. To the upside, a bounce will probably be contained by the previous high of the past couple of weeks.

The market will continue to hang on to headlines involving the US/China trade talks, which greatly influence what happens with the risk appetite in both the S&P 500 and the Japanese yen overall. As the headlines are slightly more positive, that should send this market higher. Obviously, the exact opposite can be true.

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This article was originally posted on FX Empire

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