USD/JPY Price Forecast – The US Dollar Breaks the Top of Inverted Hammer

The US dollar rallied a bit during the trading session on Friday, as the jobs number was not quite as horrific as originally thought. That being said, the market is likely to see a lot of resistance above at the ¥107 level, and therefore I think selling signs of exhaustion should make quite a bit of as the level had previously been massive support. Market memory dictates that there should be sellers in that area, so therefore I am more than likely to start shorting any time we can get close to that area.

USD/JPY Video 11.05.20

To the downside, the ¥106 level is an area that could offer a little bit of support, but if we break down below there it is likely that the market goes down to the ¥105 level. At this point in time, the market is likely to continue to go downward, but we will get the occasional bounce that we can take advantage of. If we do break above the ¥107 level, there is still plenty of resistance that extends all the way to the 50 day EMA. Because of this, and simply fading times when this market gets a bit ahead of itself, as the downtrend is firmly ensconced, but the volatility has shrunk a bit, showing signs of stabilization. With that, I think it is more of a grind going lower as we have seen over the last couple of weeks. Ultimately, we are in a downtrend so you should continue to approach this market in that fashion. After all, there are a lot of concerns out there and it makes quite a bit of sense that the Japanese yen will attract a lot of attention.