USD/JPY Price Forecast – Dollar Continues to Sit at The ¥110 Region

The US dollar has rallied during the trading session on Monday to kick off a very quiet session mainly due to the fact that the United States and Canada were both celebrating Labor Day. Because of this, there would have been a significant amount of liquidity missing from the market, as the major banks in New York were not online. Ultimately, we need to see what happens in a complete cycle around the world, and we did not get that opportunity on Monday. However, as we have seen multiple times before, the ¥110 level seems to be a bit of a anchor for price.

USD/JPY Video 07.09.21

The 50 day EMA is also going sideways at this point, as the indicator tends to be widely followed. With that being sideways, that suggests that we just do not have anywhere to go in the meantime. To the upside, the ¥110.75 level is an area that will probably continue to show resistance, just as the ¥109 level underneath will offer support. This is especially true as the 200 day EMA is starting to reach towards that ¥109 level.

This is a pair that is highly sensitive to risk appetite as the Japanese yen is considered to be a “safety currency” that a lot of people will run towards if there is concerned. Furthermore, you need to keep an eye on the interest rate differential between the United States and Japan, especially on the 10 year bond market. Those markets do tend to move the differential in this pair quite drastically, so that of course comes into play as well. In the short term though, I would not expect too much.

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