USD/JPY Price Forecast – US Dollar Climbs Back Towards ¥110 Level Yet Again
The US dollar has rallied a bit during the trading session on Friday to reach towards the ¥110 level, an area that has been important more than once. Because of this, you should not be surprised at all to see that the market is stalling a bit. Nonetheless, the ¥110 level is essentially an area of magnetism for price, and what I would consider to be roughly “fair value” in this market. The 50 day EMA is slicing through this general vicinity, and therefore that is another reason to think that we are hanging around this area.
USD/JPY Video 20.09.21
To the upside, I see the ¥110.75 level as resistance, while I see the ¥109 level underneath as a significant support level. The 200 day EMA sits just below the support level, so I think that adds a little bit more interested that area. Ultimately, this is a market that I think will have to make a bigger decision, but as we see at this point in time, we are essentially still stuck in the same consolidation that we have been in for a while.
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Keep in mind that there is a certain amount of risk appetite built into this pair, but you should also pay close attention to the fact that the 10 year notes from both countries have a major influence on where we go as well, as this pair is highly sensitive to yield differential. The market will continue to bounce around in the short term, and I do not see a breakout being imminent. However, if we do finally get that breakout, the market could move rather quickly.
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