US Dollar Continues to Pull Back

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen during the trading session on Tuesday to test the crucial ¥127.50 level again. This is an area that has been important more than once, so it would not surprise me at all to see a little bit of a reaction. However, if we break down below this area then we will more than likely go looking to the ¥125 level. This is an area that had previously been resistance and should now be support. The 50 Day EMA is starting to rise towards that level, so that makes it even more important.

At this point, the market needs to either find buyers underneath or grind sideways in order to burn off some of the excess froth that we have recently seen. The market more than likely will continue to be a bit noisy, but it is very difficult to imagine shorting the market anytime soon. This is because the Federal Reserve is looking to hike rates, while the Bank of Japan continues to do everything it can to drive down yields in the form of quantitative easing.

Looking at this chart, the market continues to see a lot of positivity over the longer term, and as long as that continues to be the case, it is simply a matter of buying dips along the way as we continue to see plenty of movement in this market. The market has come a long way, but the ¥130 level above should be a significant amount of resistance just waiting to happen. Ultimately, this is a market that will try to get there, but it is obviously a large, round, psychologically significant figure that will come into the picture.

USD/JPY Price Forecast Video 27.04.22

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