USD/JPY Price Forecast – US Dollar Quiet Against Yen

This is a difficult market to trade right now, because quite frankly we have so many different things moving at the same time. One of the things that is worth paying attention to is the fact that the US dollar is losing strength in general, and therefore it reinforces the idea of a downtrend in this market. However, at the same time this pair does tend to rally a bit when we see more of a “risk on” type of environment. After all, the Japanese yen is considered to be a massive safety currency, and therefore people will sell it when stock markets are rocking to the upside. However, with the stimulus coming out the United States very likely that there is still downward pressure. In other words, it is having a lot of trouble figuring out which cue to follow.

USD/JPY Video 10.12.20

The 50 day EMA is above and painted red on the chart. I believe that it is a significant resistance barrier, followed by the blue downtrend line and the 200 day EMA. If we rally from here any signs of exhaustion should be sold into, simply because we have been in such a massive downtrend. Underneath, the ¥103.70 level is short-term support, but if we break down below there it is likely that we go down to the ¥103.25 level. After that, it opens up a possibility of a move down to the ¥102 level, where we have seen massive buying previously. At this point, I have no interest in trying to buy this market and I think what we are going to see is opportunities to short this market time and time again but probably just on short-term charts more than anything else.

[fx-primis-ad]

For a look at all of todays economic events, check out our economic calendar.

[fx-article-ad]