USD/JPY Weekly Price Forecast – US dollar slams into major resistance
The US dollar has rallied significantly against the Japanese yen, reaching towards the down trending line of the massive symmetric triangle. Because of this, I think that we are at an area that could cause serious issues, but in the end I also believe that the market participants are trying to break out of this major triangle, and if it does it’s likely that we could continue to go much higher. I also recognize that underneath there should be supported at the ¥111 level, an area that has been supportive more than once as of late. Because of this, I think short-term pullbacks will offer buying opportunities for those looking to find tune an entry, but obviously if we can break above the ¥112.50 level, we have a break out and I think at that point it’s likely that we could see the market move towards the ¥114.50 level next.
Your capital is at risk
This pair is highly sensitive to global equities, with a particular correlation to the S&P 500. If it rallies, a lot of times that will push this pair higher as people sell the Japanese yen. I think at this point, the market is going to break out eventually, but we need some type of headline to cross the wire, or to simply more flow into the market. The weekly candle looks very strong, so I do think that follow-through is likely. If we break down below the ¥110 level, that could change everything, but at this point it doesn’t look likely.