USD/JPY Price Forecast – The US Dollar Continues to Drift Lower

The US dollar has fallen a bit during the course of the trading session on Monday again to reach down towards the ¥109 level. The market has tested that area a couple of times now, and therefore think it is probably going to send this market towards the 200 day EMA given enough time. The market is essentially consolidating at this point, with the 200 day EMA underneath possibly offering support, while the ¥110.50 level has offered resistance. It will be interesting to see how this market plays out, as it is so sensitive to risk appetite in general, as the Japanese yen is considered to be the “safety currency” that a lot of traders will go running towards.

USD/JPY Video 17.08.21

Interest rate differential will also play a factor as well, so pay attention to the 10 year note as well as JGB interest rates, as that has a major influence on what happens next. Looking at this chart, I think it is only a matter of time before we have to make a bigger move, but currently I think we will continue to be noisy to say the least, so at this point in time it is likely to be a scenario where you need to be cautious with your position size as we could see very noisy behavior in this market. It is not until we break out of the range that we can put serious money to work, but right now I just do not see that happening. As we head through the month of August, keep in mind that it is typically quiet, so I would not expect fireworks in the short term.

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