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USD/JPY Price Forecast – US dollar continues to grind

The US dollar continues to grind against the Japanese yen, falling initially during the trading session on Wednesday, but bouncing a bit later in the day. At this point though, we are still very much in the consolidation phase.

The US dollar has gone sideways overall against the Japanese yen, showing a bit of resiliency. However, the ¥108 level underneath is massive support, so I think it is going to continue to be able to hold the market up a little bit. However, if we break down below the ¥108 level, then I think the market could go down to the ¥107 level, possibly even the ¥105 level. I also recognize that rallies could be selling opportunities, but we have seen a lot of destruction in this market so I think that a bit of calm trading is probably necessary.

USD/JPY Video 17.01.19

If we do rally from here, I suspect that ¥109 and ¥110 both will be very resistive, so I’m waiting to see signs of exhaustion between here and there to start shorting again. I believe that the US dollar will be on its back foot due to the Federal Reserve looking a bit softer than once thought, and of course backtracking a bit when it comes to raising interest rates in 2019. There are a lot of people out there now that think the US dollar will be soft during the year because of this, and of course the Japanese yen should continue to find buyers as global issues continue to cause major problems. Remember, this is a wrist sensitive pair so pay attention to the overall economic headlines as it can give you an idea as to where we are going to go next. Rallies at this point continue to be faded.

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This article was originally posted on FX Empire

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