USD/JPY Weekly Price Forecast – US Dollar Continue Slow Grind Lower
The US dollar has rallied significantly during the course of the week but gave back some of the gains closer to the end of the week as the market continues the overall drift lower. Quite frankly, this is a market that will put you to sleep if you are not careful, but it certainly has more of a downward proclivity than an upward one. I think at this point we are more than likely going to go looking towards the ¥105 level, perhaps even lower than that to reach down towards the ¥104 level. Ultimately, I think that we probably continue to see more noise than anything else.
USD/JPY Video 12.10.20
The market continues to be driven based upon the idea of stimulus and risk appetite, which of course is all over the place. With that in mind, I think that this is more or less going to be a short-term driven market, so therefore the longer-term charts do not really tell you anything other than the overall trend. That being said, I think we are more likely than not to see trouble ahead, and therefore I prefer fading rallies to buy the relative safety of the Japanese yen.
Your capital is at risk
Longer-term, it is very difficult to understand where we may go due to the fact that so much of what is driving the market right now is based upon politicians, which of course act like children. The fact that the market is relying on politicians tells you just how tentative the entire situation is. This pair does tend to favor the Japanese yen when it is “risk off”, so keep that in mind.
For a look at all of today’s economic events, check out our economic calendar.