USD/JPY Price Forecast – US Dollar Drifts Lower Against Yen

The US dollar initially tried to rally during the trading session on Tuesday but gave back the gains above the ¥104 level, so it looks like we are going to continue to see pressure above as we sell off every time we try to hang onto a move to the upside. The 50 day EMA above offers significant resistance as you can see over the last several months and is drifting much lower. At this point in time, you should also keep in mind that the Federal Reserve is coming out with an announcement during the trading session on Wednesday, so it makes sense that people are a bit cautious about the US dollar itself.

USD/JPY Video 16.12.20

To the downside, if we were to break down below the lows on the trading session on Monday, then we could go lower, perhaps down to the ¥103.25 level, possibly even down to the ¥102 level if we get a bit of momentum going. Over the next 24 hours though, it could be rather quiet as we await announcements from the Federal Reserve to give us a little bit of clarity when it comes to the US dollar and perhaps where we go from here. At this point, I believe that short-term rallies will be selling opportunities, especially near the 50 day EMA, and therefore I think that if you are looking for a short-term trade, fading those rallies on signs of exhaustion would be the best way to go. Ultimately, I think this is a market that eventually breaks down but we may get a bit of noise in the short term so you should have plenty of opportunities.

[fx-primis-ad]

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

[fx-article-ad]