USD/JPY Price Forecast – US dollar rallies again against Japanese yen

The US dollar has broken higher during the day on Friday, clearing the top of the Thursday candle stick which was very neutral. This is a strong sign, but when I look at the longer-term charts, I can clearly see an area above that should cause quite a few problems for the buyers. The ¥110 level of course is a large, round, psychologically significant figure. Beyond that, the 61.8% Fibonacci retracement level is just above the ¥110 level. The 50 day EMA is approaching that area as well, so I think there is a nice confluence of selling pressure there just waiting for the market to come back to it.

USD/JPY Video 21.01.19

At that point, I would anticipate that the market will probably go back to the ¥108 level. That being said, I think that the market will probably continue to see a lot of selling pressure longer-term, because quite frankly the Federal Reserve is looking more dovish in general and that should weigh upon the US dollar. I’m going to look for a daily exhaustive candle closer to the ¥110 level to start selling, because quite frankly after the massive selloff that we had seen, it would make sense that eventually the selling pressure would come back. This has been a massive rally, but in the end most of the issues out there still remain. Most of the pundits on Wall Street are looking for a stronger yen this year anyways because of the various issues globally.