USD/JPY Price Forecast – US dollar continues to grind against Yen
The US dollar bounced from the trendline on the daily chart that I have marked, and now that the 61.8% Fibonacci retracement level has offered support and the trend line looks as if it is going to at least try to hold, this could be the one yen related pair that holds up. However, if we break down below this trendline, that could be very negative, and most certainly if we break down below the 61.8% Fibonacci retracement level at the ¥111.50 level, that would be very negative as well. At this point, the market is of course going to be very skittish as there is a major “risk off” out there, but the US dollar portion of this does help.
Your capital is at risk
At this point, it’s probably best to keep your decision size small but if you are looking to short the yen, it is most certainly the US dollar that you will be doing it against. There is a lot of noise out there, so keep that in mind as well, as the pair most certainly will struggle to find clarity. At this point, if we were to break down below the downtrend line, you could make a case for a strong bearish flag breaking to the downside, which would have a target at the very beginning of this trendline at the very least. Going into the weekend though, I think what we will see more than anything else is a lot of position squaring.