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USD/JPY Price Forecast – US dollar forming a base against Japanese yen

The US dollar has bounced recently from the 61.8% Fibonacci retracement level, and we are now hovering just above the ¥112 level. At this point, it looks as if we could rally from here but we also get the FOMC Meeting Minutes late on Wednesday that could influence where we go next.

The US dollar has pulled back against the Japanese yen, reaching down towards the 61.8% Fibonacci retracement level. This is an area that of course would offer a lot of support based upon not only the Fibonacci retracement tool, but also the previous resistance barrier that should now be supportive. I think at this point, the pair is likely to go higher if the stock market can recover even further, and of course if interest rates go higher, that could also drive this pair higher due to the interest rate differential as the Bank of Japan is just now starting to think about pulling back in some of the liquidity. We arty know that the Federal Reserve is likely to continue raising interest rates going forward, so therefore it should not be a surprise that this pair continues to grind higher.

Recently, we had attacked the ¥114.50 level, an area that was major resistance in the past. The pullback from there makes sense, because quite frankly you can’t just crash into it with a massive spike in price and expect to go through it without some type of major catalyst. Because of this, I think that the market pulling back like this is healthy as we try to build up the necessary momentum to get above there in continue to go to the ¥115 level. Looking at this chart, it’s obvious that the last couple of days have been much kinder to this pair. If we were to break down below the 100 level ¥0.50 level, then the market could break down.

USD/JPY Video 18.10.18

This article was originally posted on FX Empire

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