USD/JPY Price Forecast – US Dollar Continues to Find Support

The US dollar has bounced a bit during the trading session on Tuesday to show resiliency yet again. That being said, the market is likely to see more of an upward bias than anything else, especially when you look at the last couple of months. The 50 day EMA sits just below and tilt higher, so I think that what we are seeing here is a significant trend trying to form itself. The ¥109 level is right about where the 50 day EMA is, so that also adds a little bit of credence to the idea of a bounce.

USD/JPY Video 09.06.21

To the downside, if we were to break down below the ¥109 level and the 50 day EMA, then it is likely that we go looking towards the ¥108 level, where we had formed a nice “V bottom” at the 38.2% Fibonacci retracement level. In other words, I do think that if we were going to start selling off, it would more than likely be somewhat supportive underneath and therefore it would probably not be too much to worry about. In fact, it is not until we break down below the ¥108 level that I am starting to concern.

Looking at the overall health of the market, keep in mind that this pair does tend to move right along with risk appetite more than anything else, so pay attention to the stock market and commodity markets as well, because they will give you an idea as to whether or not people are willing to short the Japanese yen itself, which of course is considered to be a major safety currency.

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