USD/JPY Price Forecast – US Dollar Bounces Against Yen After Initial Selloff

The US dollar has initially fallen during the trading session on Tuesday but has also found enough support at the ¥113.50 level to turn around and form a bit of a hammer. At this juncture, it certainly looks as if the market is going to continue to see buyers on dips, and an attempt to pressure to the upside. The ¥115 level above is a major resistance barrier, so if we can break above that it would of course change a lot of things. At that point, I would have to look at this through the prism of “buy-and-hold” for a longer-term situation.

USD/JPY Video 03.11.21

Pullbacks at this point continue to see ¥113.50 as an area of support, but I think ¥112.50 will also come into the picture even if we break down further, due to the fact that the 50 day EMA is racing towards that area. In fact, it is not until we break down below the ¥110 level that I would be concerned about the trend in general. That does not look like something that is going to happen anytime soon, so it is worth noting that the market is simply killing time after a major shot higher, which is what this pair typically will do. Keep in mind there is a certain amount of “risk on/risk off” attitude when it comes to this pair, as the Japanese yen is considered to be a major safety currency. I do believe at this point in time, this is more of a “buy on the dips” situation, and that certainly seems to be the case of the last couple of weeks.

For a look at all of today’s economic events, check out our economic calendar.