USD/JPY Price Forecast – US Dollar Continues to Build Flag
The US dollar has initially rallied during the trading session on Wednesday but continues to see this bullish flag build, as we have pulled back from the downtrend line. That being said, the real challenge is at the ¥115 level just above, which is a major barrier on the monthly charts. The question now is whether or not we can break through it, because if we do, that could open up a longer-term “buy-and-hold” type of investing trade.
USD/JPY Video 12.11.21
To the downside, the ¥112.50 level has been supportive over the last couple of days, and also features the 50 day EMA. That being said, the market is likely to see a lot of back and forth in this general vicinity as we have seen so much in the way of consolidation. I still believe that this market will end up being a bit of a “buy on the dips” type of scenario, and with that in mind I think that we will get another opportunity rather soon. On the other hand, if we break above the top of the downtrend line, then we still have to deal with the ¥115 level, something that is going to take a significant amount of effort to break through.
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Based upon the bullish flag that is being formed, it does suggest that we make a move towards the ¥118 level if we break out, so that is my longer-term target. I do not expect to hit that anytime soon though, and therefore I have to be somewhat patient in order to trade this market. Nonetheless, I have no interest in shorting this market anytime soon.
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