USD/JPY Forecast: Dancing Around JPY Support Level

Christopher Lewis

The US dollar has gone back and forth during the trading session on Friday, to close out the week on a relatively positive note as the candlestick looks a bit more like a hammer than anything else. This is a market that has the 50 day EMA sitting just above it though, so that could come into play and cause some issues. Ultimately, if we were to break down below the candlestick from the Wednesday, Thursday, and of course Friday session, the market will then wipe out a lot of that support and go looking towards the ¥106 level.

Below there, the market then will accelerate down to the ¥105 level, an area that I think is significant support. The ¥105 level is an area that has been important more than once, and I do think that it is only a matter of time before the buyers would come back into that level. However, if the ¥105 level were to be broken down significantly, then the market goes down to the ¥102.50 level.

Advertisement
The yen is a popular asset during turbulent times.

To the upside, the 50 day EMA of course will offer resistance but so will the 200 day EMA. Furthermore, the market will see a lot of resistance at the ¥109 level. The market seems to be moving back and forth between 200 PIP levels, and I think that will continue to be the way forward. I would also point out that the market is extraordinarily tight, as the range of the last couple of weeks has shrunk. This does not last forever obviously and could lead to an explosive move. However, we do not have that right now and it is likely that we will see a move sooner rather than later. I think that the next week or so could be crucial, but this is one of those situations where you will “know it when you see it”, as we get a large candlestick in one direction or the other. I still favor the downtrend though, because quite frankly we have been in a downtrend for ages, recent volatility in the month of March notwithstanding. Keep in mind that this pair ask overly sensitive to risk appetite, and therefore you should pay attention to the stock markets and the like to give you an idea as to how this market may trade. Remember, the Japanese yen is considered to be the “safest currency.”

USDJPY

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Currency Pairs:
Comments

Did you have a good experience with this broker? A bad one? Tell our team and traders worldwide about your experience in our User Reviews tab. Your email address will not be posted.

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.