USD/JPY Weekly Price Forecast – US Dollar Runs Into Brick Wall

The US dollar has rallied significantly during the week, breaking towards the psychologically important ¥110 level. That is an area that has been important more than once, and when you look at the longer-term charts, it appears to be what I would consider “fair value.” The markets have been looking at the ¥105 level underneath as massive support, while the ¥115 level above has offered resistance. That being the case, then ¥110 is basically the median.

USD/JPY Video 10.02.20

The next couple of weekly candlesticks will be crucial, as we have been rallying in a nice up trending channel for several months. That being the case, the market breaking down below the uptrend line should send this market much lower. That would be an extraordinarily negative sign. On the other hand, if the market was to close above the ¥110 level on a nice strong weekly candlestick, then it opens up the door to the ¥112 level, and then possibly the ¥115 level. You should also note that the 200 week EMA is sitting right at the level that the market is trading at, so therefore should continue to see a lot of issues. Ultimately, the market is at a major inflection point, and therefore it will be interesting to see how we react in this general area. The next couple of candlestick should be rather crucial as to where we go for the next 500 pips or so, and perhaps the next two years. At this point, being cautious could be a huge benefit.

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