USD/JPY Price Forecast – US Dollar Continues Consolidation

The US dollar has rallied just a bit during the trading session on Wednesday against the Japanese yen, as we continue to see a lot of noise in general. Because of this, the market is likely to continue seeing noisy behaviors, with the US dollar being thrown around due to the massive amounts of spending coming out of America and the loose monetary policy that we are seeing out of the Federal Reserve. However, recently there has been a little bit of rumbling coming out of the Federal Reserve members about the possibility of “talking about talking about tightly and monetary policy.” If that is going to be the case, longer-term this pair should continue to go higher.

USD/JPY Video 27.05.21

I do believe that the ¥109 level will continue to be important, and therefore I think what we are looking at is a scenario where the “buy on the dip” scenario continues to be crucial. If we can break above the ¥109 level, then it is possible that we go looking towards the ¥110 level next. If you take a look at the overall attitude of the market, you can also make an argument that the market is also forming a bit of an ascending channel, which of course suggests that we could go higher in a very noisy manner.

This being the case, I do not have any interest in shorting this market, at least not until we break down below the hammer at the 38.2% Fibonacci retracement level that turned this entire thing around to begin with. With this being the case, I continue to be bullish, but I recognize that it is going to be very choppy.

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