USD/JPY Price Forecast – US Dollar Turns It Around

The US dollar has initially pulled back during the trading session again on Wednesday against the Japanese yen but has turned around to find support just above the 50 day EMA. The question now is whether or not we are still in the midst of a potential trend change？ It certainly looks as if it is possible, due to the fact that we have come back to basically test the downtrend line, and of course the market had broken above that trendline so drastically.

USD/JPY Video 11.02.21

The question now is whether or not this can continue？ Keep in mind that even if the US dollar is essentially in a downtrend, it may behave differently against the Japanese yen due to the fact that a lot of the time, it will rally in more of a “risk on” type of scenario. Furthermore, the market is likely to see the interest rate differential as reason enough for the pair to rise. Typically, that is one of the main drivers of this pair, the spread between the 10 year note and the 10 year JGB market.

[fx-forecasts-cta instrument=markets broker=etoro link=https://ad.doubleclick.net/ddm/clk/483417007;290243260;x disclaimer=75%_of_retail_CFD_investors_lose_money]

The ¥104 level underneath should offer significant support, but if we were to turn around and make another high above the candlestick from Friday, then I think the market takes off and continues to go much higher. Ultimately, we are also starting to see the 50 day EMA turn higher, so that is a reason to think that perhaps the buyers are starting to come in and push this higher over the longer term as well. If we were to break down and close below the ¥104 level, then I would start to think about a continuation of the longer-term downtrend.

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

[fx-article-ad]