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USD/JPY Price Forecast – US Dollar Continues to Consolidate Against Japanese Currency

By:
Christopher Lewis
Published: Nov 3, 2021, 14:05 UTC

The US dollar has gone slightly soft during the trading session on Wednesday as we continue to hang around the ¥114 level. This is an area that will continue to be important.

USD/JPY Price Forecast – US Dollar Continues to Consolidate Against Japanese Currency

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The US dollar has softened ever so slightly against the Japanese yen on Wednesday as we continue to build a little bit of a rectangle. You can also make the argument that this is a bullish flag, but either way we are trying to digest the recent gains, which had been somewhat parabolic. This makes a certain amount of sense, as markets had gotten way ahead of themselves. That being said, I do think that it is only a matter of time before we see another attempt to break out to the upside, because quite frankly the ¥115 level is going to take some effort to get above, so the fact that we are hanging around in this area does suggest that we are in the process of attempting that.

USD/JPY Video 04.11.21

That being said, the market was the pullback from here, the 50 day EMA sits just below the ¥112.50 level, and therefore I think that is your next major support level. The 112.50 level is a minor support level, but it does suggest that perhaps there is the opportunity for a “buy on the dips” scenario, because even after that, we have support at ¥111.50 and the ¥110 level where the 200 day EMA sits. All things been equal, this is a market that will continue to be very well supported, and it is not until we break down below the ¥110 level that I would be interested in shorting this market. Keep in mind that this pair is also sensitive to risk appetite, so if risk appetite starts to pick up again, that could push this market to the upside.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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