USD/JPY Price Forecast – US dollar pierces 50 day EMA
The US dollar rallied a bit during the trading session on Tuesday, breaking above the 50 day EMA and attempting a breakout. However, we also have the Federal Reserve chairman Jerome Powell speaking in front of Congress, and therefore we could see a lot of movement in the US dollar in general. Overall, this is a market that is trying to find some type of bottom at this point, but I think a pullback could be coming.
USD/JPY Video 10.07.19
Having said that, if we do break above the candle stick for the session, extensively the ¥109 level, it’s very likely that this pair will continue to reach towards the ¥109.60 level next. The alternate scenario of course is that we pull back and into the noise underneath, only to find value again and start rallying. I believe that Jerome Powell will do whatever it takes to lift stocks, and therefore this pair should get a bit of a boost due to stocks rallying from all of that easy money.
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If he does something to disappoint the market though, this is a pair that will probably be sensitive to that and break down a bit. I wouldn’t expect anything major, but I would certainly recognize that there could be a bit of a pullback. If we do end up going below the ¥108 level, then I would be concerned, perhaps thinking that we could go down to the ¥107 level. All things being equal though I am still bullish.
Please let us know what you think in the comments below