USD/JPY Price Forecast – US dollar rallies to end the week

The US dollar rallied against the Japanese yen during the trading session on Friday, as we have seen the European Union come to an immigration deal, at least in theory. Because of this, there was more of a “risk on” move, which of course favors this pair as we can begin to focus less on trade tariffs and focus more on interest rate differentials as traders feel a bit better going into the weekend. · FX Empire

Christopher Lewis

Updated Fri, Jun 29, 2018, 9:04 PM

The US dollar has been bullish during most of the session on Friday, breaking towards the ¥110.75 level. That’s an area that has been resistance in the past, and of course we have broken above the downtrend line, although just barely. The market looks likely to go looking towards the ¥111 level, and if we can break above there, I believe that fresh, new money will come into this market and we should continue to go much higher. In the meantime, I would assume that we remain consolidated, but should favor the upside all things being equal, as we have stronger interest rates in the United States as compared to Japan overall.

I think that pullbacks could offer buying opportunities, but I would be very cautious about putting too much money to work, at least until we can clear the ¥111 level. A break above there should open the door to the ¥112.50 level next. Overall, I believe that we will continue to see noisy trading in this pair, as the headlines will continue to move from day-to-day, as most of what we are moving on is pure emotion these days. Anybody who has tried to trade this market previously would know that this is a very emotionally charged market, so be careful but I think overall we will eventually break out to the upside.