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USD/JPY Price Forecast – US dollar fails to hang onto gains

The US dollar initially tried to rally during the trading session on Tuesday but gave back quite a bit of the gains in early trading. This shows a general malaise when it comes to risk appetite, as there are a multitude of concerns out there to continue to weigh upon this currency pair.

The US dollar try to rally initially during the trading session on Tuesday but gave back most of the gains as we reached towards the ¥108.75 level. The market continues to look as if it is ready to roll over, but I also recognize that the ¥108 level is important. That being the case, I think that a break below that level should unleash a new way of selling, perhaps sending traders looking towards the ¥170 level, followed by the ¥105 level. Remember, this pair tends to move with the overall stock indices, which of course are going to be holding their breath as we await the boat out of the UK parliament. The question isn’t so much whether or not the Brexit boat will pass, it’s whether or not it will be a blowout. If it is a blowout, then people will start to wonder whether or not Teresa May will have a job.

USD/JPY Video 16.01.19

At this point, I think that rallies continues to be sold, and that the ¥109 level should continue to offer plenty of resistance. Beyond that, the ¥110 level is even more resistance. With that being the case, I like the idea of shorting this market on short-term rallies that show signs of exhaustion, perhaps even on shorter-term charts. Ultimately though, I think that this market will struggle and it will find plenty of trouble above. That being the case, I don’t have any interest in buying this pair.

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This article was originally posted on FX Empire

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