USD/JPY Forecast – US Dollar Continues to See Downward Pressure
US Dollar vs Japanese Yen Technical Analysis
This could end up being a nice buying opportunity because longer term it’s very unlikely that the Bank of Japan can do anything to keep the Japanese yen from losing strength over the longer term. But this has been a brutal week.
So, at this point, I’m watching very closely around the 152 yen level for signs of a bounce in the US dollar. This is a market that is also dancing around the 50 day EMA as well. And as a result, it’ll be interesting to see how this plays out. If we turn around and rally from here, we could go to the 155 yen level. This is a potential trade that I am watching closely. While I recognize that we all wait for these opportunities, the reality is that they are difficult to take sometimes, as the momentum is so scary. The best trades are often the most difficult to handle psychologically.
On the other hand, if we continue to break down, then we could be looking at the 150 yen level. Remember, we’ve been in an uptrend for what seems like a lifetime, and of course, this took a bit of central bank intervention. So, in other words, you probably have a little bit of time before the market takes off if it doesn’t recover.
But clearly, shorting at this point is shorting directly into what should be support based upon market memory and the massive amount of resistance that we previously had right around the 152 yen level that extends down to the 150 yen level. In other words, it takes a lot of effort to break below there.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire