Forex Analysis Report 11-13-18...USD/JPY Upside Might Be Limited
I last posted about the USD/JPY back at the beginning of October.
One potential set-up would be if price can break out to the upside, a pull back into what would now be a daily demand zone would be a good place to go long to at least the 117.00 - 118.00 level.
Price didn’t break out, but has since pulled back and attempting to break out again.
For more than 50 years, the US dollar has served as the world’s primary safe-haven currency, during times of political, economic, and financial turmoil. Also, during risk-off times, the Yen is one of two currencies that appreciate relative to the USD. As a result, there is this tug-a-war constantly taking place between the USD and Yen. So if the Feds start to get "gun shy" with increasing rates because the economy is stalling, peaking and/or declining, expect the USD/JPY to go lower.
If US yields struggle to push higher from here, this could drag USD-JPY lower. But even if yields do rise, USD-JPY may struggle to gain. Higher US yields, particularly when they move sharply higher, can increase risk aversion, pushing equity markets lower and driving us into a risk off world. In that environment, the JPY is likely to be the best performer in G10.
The immediately level price has to contend with is level at 115.00.
NOTE: the dotted lines represent the horizontal lines of the white rectangle box...the no trade zone.
The fact that price has come close, but couldn't touch this level, not once, not twice, not three, not four times (pink circles), tells me there were sell orders licking their chops waiting for price.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
