USD/JPY Price Forecast – US Dollar Continues to Look Soft

The US dollar has gone back and forth against the Japanese yen during the trading session on Thursday as we continue to dance around the ¥103 level. This is an area that has been previous support before, so it does make sense that the markets would stall in this general vicinity. This is an area that has been tested a couple of times already, so I do think that we will eventually be able to break down. Ultimately though, this is a market that probably goes down towards the ¥102 level, an area where we have seen a lot of upward pressure in the past and a recovery.

To the upside, I see the ¥104 level as significant resistance not only due to structure, but the fact that the 50 day EMA is hovering around that area as well. It should be noted that the 50 day EMA has been crucial more than once, so I do think that it is only a matter of time before sellers would come back into that area. I would not read too much into the candlestick on Thursday though, because quite frankly most traders will not be bothered to be trading. All things being equal, it is likely that the market continues the overall trend, but we may have a bit of noisy trading heading towards the jobs number next week.

Furthermore, we have the US Senate runoff elections in Georgia that could cause a bit of volatility early next week as well. All things being equal, this is a market that should continue the trend, but we may get a sudden bit of volatility along the way.