USD/JPY Weekly Price Forecast – US dollar rallies during the week

The US dollar has rallied significantly during the week, breaking the top of the shooting star from the previous week, a very bullish sign. By doing so, it’s likely that the market will continue to go back and forth in this general vicinity, mainly because we are looking at tariffs being slapped on the Chinese by the Americans again, and more than likely the Chinese will turn around and react. In fact, they have already stated that was going to be the case, and Donald Trump has also suggested that there will be more tariffs after that if they do in fact respond.

Because of this, the market looks as it is trying to build up momentum to make the next move anyway, and I believe that the hammer from a couple of weeks ago should continue to offer support on dips, but it also looks very resistive above at the ¥111 level. I think essentially most traders are and a bit of a holding pattern right now, and I think this is a market that could be very choppy and difficult to deal with as we work our way through the trade war situation and of course a lot of global concerns overall. The US dollar does tend to be a bit of safety in the Forex world, except for the Japanese yen market. Because of this, we could get conflicting momentum. Longer-term, we do have a lot of interest rate differential influence as well, and all things being equal the US dollar should eventually prevail.