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USD/JPY Weekly Price Forecast – US dollar rallies against Japanese yen

The US dollar rallied a bit during the week, breaking above the top of the previous week which of course is a very bullish sign. However, I think there is plenty of resistance just above just waiting to get involved, showing signs of exhaustion will attract a lot of attention.

The US dollar rallied a bit during the week, breaking above the top of the previous week candle. That being the case, it looks as if we are going to continue to go higher, at least for the short term. However I believe that the 61.8% Fibonacci retracement level, just about the ¥110 level, should be an area where we will see selling pressure. If we can break above there, then we could go all the way back to the ¥112 level. That of course would be a very bullish sign, at least for the short term. All things being equal though, I do think that eventually you will have a longer-term selling opportunity here based upon the Federal Reserve changing its tune about interest rate hikes.

USD/JPY Video 21.01.19

Beyond that, there are a lot of concerns out there globally, and it does look like the global economy is going to slow down a bit this year. If it becomes worse than imagined, then I think we can go much lower as the Japanese yen is of course a safety currency. After the flash crash, there has been a horrific amount of damage done to the uptrend, which now has been broken. However, we have had a nice rally over the last couple of weeks, but we still haven’t change the overall attitude. Signs of exhaustion will be jumped on, and I believe that closer to the 61.8% Fibonacci retracement level you should see that come into play.

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This article was originally posted on FX Empire

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