USD/JPY Price Forecast – US Dollar Slams Into Resistance

The US dollar initially gapped higher against the Japanese yen, felt to fill the gap, and then shot towards the ¥104 level. That is an area that has been important more than once, so it is not a huge surprise to see that we have pulled back from it. In fact, this is almost a perfect technical bounce, and looks as if it is going to offer a nice selling opportunity. The ¥104 level was the last breakdown point, so traders will continue to look at it as a potential level from which to trade.

USD/JPY Video 22.12.20

Keep in mind that the liquidity would have been very thin during trading on Monday, as it is the holiday season. With that being the case, you can probably only read so much into the run up to the ¥104 level, as the world raced to buy the US dollar in general. Because of this, it had a little bit of a “knock on effect” in this pair, even though the Japanese yen is considered to be a safety currency.

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With this being the case, and the fact that we have pulled back a bit, suggest that we are going to continue the longer-term downtrend and therefore I am still a seller, but I also recognize the next several sessions may be a bit difficult due to thin conditions. Fading short-term rallies will be the way I continue to play this market, and therefore I am not interested in buying at all.

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