USD/JPY Price Forecast – US Dollar Heading Towards Big Figure

The US dollar initially fell during the trading session on Wednesday to show signs of weakness, but then turned around to show signs of life again later in the day to reach towards the ¥104 level. The ¥104 level is a large, round, psychologically significant figure, and an area where we have seen selling pressure. Furthermore, the 50 day EMA is starting to race towards that level, so it could of course offer a bit of technical selling as well. That being said, the market is likely to be very choppy heading into the new year, but ultimately, I do think that the US dollar continues to suffer at the hands of stimulus.

USD/JPY Video 30.12.20

To the downside, I believe that the ¥103 level is going to be a target, perhaps even down towards the ¥102 level. All things being equal, this is a market that I think continues to offer short-term selling opportunities on signs of exhaustion, and therefore it should continue to offer short-term trading opportunities more than anything else. I would not be a buyer, at least not until we break well above the ¥105 level, something that is going to be difficult to take out anytime soon.

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Not only do stimulus weigh upon the US dollar, but it looks as if we are going to continue to see more stimulus, which will also cause some issues. With this, I like the idea of fading these rallies, but I would not try to hang on for big moves, nor what I put huge amounts of money into this market simply because there will be more volatility and other pairs.

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