USD/JPY Price Forecast – US dollar pulls back against yen to find buyers

The US dollar has pulled back against the Japanese yen during the trading session on Thursday but has found enough support at the 61.8% Fibonacci retracement level to turn the market back around and show signs of life. At this point, the market looks as if we are trying to form some type of basing pattern, perhaps possibly an inverse head and shoulders if we extrapolate a move to the upside. That being said, it appears that the market is fighting right along as the Philadelphia Fed Manufacturing Index came out much stronger than anticipated, and over 21 instead of the expected five. That drove risk appetite higher, mainly in the US stock markets. This of course shows itself in this pair, as it does tend to follow right along.

USD/JPY Video 19.07.19

That being said, it looks like we are trying to grind towards the ¥108.70 level. There is a lot of noise between here and there just waiting to happen, but ultimately we should be able to reach that area as we have sliced through this region more than once. Ultimately, this is a market that should continue to find plenty of reasons to rally, even though we have the Federal Reserve looking likely to cut interest rates. Cutting interest rates typically will work against the value of a currency, but as long as there is a “risk on” attitude around the world, people will avoid the Japanese yen. The alternate scenario of course is that we break down below the hammer that is forming, which opens up the door for a move down to the ¥107 level.

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This article was originally posted on FX Empire

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