USD/JPY Price Forecast – US Dollar Pulls Back Slightly
The US dollar has gone back and forth during the trading session on Friday to in the week, as we continue to see a lot of volatility. Ultimately though, this is probably more to do with the idea of being a bit overextended than anything else. Keep in mind that the markets are still going to favor the US dollar in general, but the Japanese yen is of course a bit of a safety currency as well at times. With that in mind, if you are looking to play the Japanese yen you may wish to do so against other currencies.
USD/JPY Video 23.03.20
Having said all of that though, the markets overextended and that normally means that there is some type of pullback. The 200 day EMA is closer to the ¥108 level, which I do think we will revisit given enough time. Can we break below there? Of course, we can but we would need to see the US dollar loses some of its strength overall. I do believe that the market is going to continue to be very noisy but ultimately the best way to deal with that is to keep your position size relatively small.
Your capital is at risk
Ultimately, in times like this the biggest problem is staying alive, and not destroying your account. In 2008, one of the smartest things I did was to cut my position size down as the volatility was very similar to what we are seeing now. Unfortunately, many of my compatriots did not do the same thing and they blew their accounts up multiple times in this type of trading environment.