USD/JPY Price Forecast – US Dollar Continues Grind Lower

The US dollar initially tried to rally a bit during the trading session on Thursday, but then broke down a bit to reach down towards the ¥104 level. For what it is worth, there is a significant amount of options priced at the ¥104 level, and therefore it will be a bit of a magnet for price. If we can break down below there, then it is likely that we could try to break down below the symmetric triangle that we have formed. To the downside, the ¥103.25 level would be a target.

USD/JPY Video 04.12.20

If we were to break down below there, then the market is likely to go down to the ¥102 level. At this point in time, that is my longer-term target, but it may take some time to get there. In the meantime, I would anticipate short-term rallies as a potential selling opportunity. Ultimately, this is a market that is in a downtrend so I think that given enough time we will eventually continue that. However, if we were to break above the ¥105 level, it could change some of the attitude. Keep in mind that Friday is also Non-Farm Payroll, so therefore a lot of volatility could find itself into the pair.

At this point, I would keep in mind that the risk appetite of this pair will be heavily influenced by not only the jobs number, but coronavirus figures, and of course the US Dollar Index and it is motions. Currently, the US dollar is on its back foot, but I would not anticipate too much of a move between now and the jobs report. By the time we get done with the Friday session, we should have a little bit more clarity.

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