USD/JPY Price Forecast – US Dollar Trying to Make Fresh High Against Yen

The US dollar has rallied a bit during the trading session on Thursday to reach towards the most recent high, showing signs of strength again that could send this market much higher. After all, we have recently broken above the downtrend line, and starting at this point we are seeing the 50 day EMA turn to the upside. Furthermore, the 200 day EMA is starting to slowly creep to the upside as well. In other words, we are starting to see the trend shift to the upside on multiple indicators.

USD/JPY Video 26.02.21

The ¥105 level underneath has been supported recently, and of course is a large, round, psychologically significant figure. That being said, if we were to break down below that level it would not only be breaking a large, round, psychologically significant figure, but also the most recent low. To the upside, I believe that the market could go looking towards the ¥108 level, but it obviously will be very noisy due to the fact that we have seen a lot of volatility in the 10 year note which of course drives yields up and down.

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Those yields continue to strengthen the US dollar against a low yielding currency such as the Japanese yen. This has been very choppy to the upside but at the same time it certainly looks as if we have seen a significant amount of momentum and relentless bullish pressure, telling me pretty much everything that I need to know in the meantime. That being said, you will need to be very cautious about your position size, due to the fact that the volatility could shake you out in general.

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