USD/JPY Weekly Price Forecast – Is the USD Trying to Bottom Against Japanese Yen?

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar initially rallied against the Japanese yen but as we got later into the week it made a certain amount of sense that we gave up some of those gains as the PCE core index came out lower than anticipated. But quite frankly, the selling started into that announcement, so one would have to wonder whether or not the information was leaked.

At the end of the day, though, this is a market that is still in the process of trying to form some type of bottoming pattern. That being said, keep in mind that a bottoming pattern can be very noisy, and can take quite some time to flush out. There are a few reasons to think that there are buyers underneath, but we will have to wait and see whether or not they actually show up and put money to work.

And the pullback is somewhat concerning, but it’s not necessarily the death blow to the US dollar that people might think it is. It’s not until we break down below the 140 yen level that I would be truly concerned, because at that point, I think you get a bit of a freefall going. And in that environment, you probably see the Japanese yen strengthen against most things, not just the US dollar.

And that generally means that we will have a massive “risk off” type of move. All things being equal, I do think this will end up being bought into, but you need to be cautious about putting in a lot of money into this pair, because it of course is extraordinarily volatile under the best of circumstances.

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