USD/JPY Price Forecast – US Dollar Continues to Grind Higher

The US dollar has initially pulled back a bit to start the Friday trading session but then turned around to reach towards the ¥109 level. The ¥109 level is an area that of course has attracted significant attention in the form of resistance previously, so it should not be a huge surprise that it is there again. Nonetheless, the market is likely to see an attempt to get above there going forward, and if we can break above the top of the candlestick from the Thursday session, it is at that point I believe that this market will continue to reach towards the ¥110 level.

USD/JPY Video 03.05.21

On the other hand, we could pull back towards the 50 day EMA, which is closer to the ¥108 level. There is a significant amount of support in that area, not only due to the ¥108 level, the 50 day EMA, and then of course the 38.2% Fibonacci retracement level. Looking at this chart, I believe that the markets are still pricing in the different yields coming out of both countries, and obviously the United States has been winning that argument. Whether or not we can continue is a completely different story, but as things look right now, the most recent trend is most certainly strong, and it is most certainly bullish.

If we did break down below this hammers near the 38.2% Fibonacci retracement level, then we could go down to the 200 day EMA. The 200 day EMA is closer to the ¥107 level, and of course the 50% Fibonacci retracement level. At this point, it is a matter of buying the dips or the breakout. I have no interest in selling this pair as things stand right now.

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