USD/JPY Price Forecast – US Dollar Continues to Grind SidewaysThe US dollar continues to grind sideways against the Japanese yen, as we see a lot of volatility out there.
The US dollar has gone back and forth during the last several sessions to hover around the ¥107 level, and as a result this is essentially a sideways market. Ultimately, I think that we are looking at a scenario where the market is trying to figure out what to do next, but we are most clearly in a downtrend overall. If that is going to be the case, then it makes quite a bit of sense that the pair should finally break down below the range over the last couple of days and go looking towards the 160 and level. After that, the ¥105 level comes into focus as it is the next major support level on the longer-term charts. With that being the case, I believe that fading rallies still continues to work out, and of course selling breakdowns.
USD/JPY Video 18.05.20
Just above, we have the 50 day EMA which is going to cause a certain amount of noise above, and that could cause market participants to see resistance there as well. Ultimately, I like the idea of fading near that area as well. Above there, then the 200 day EMA comes into play at roughly ¥108.50, so there are plenty of technical reasons above the think that the market may struggle. I do like the idea of fading short-term rallies and adding on the way down. This pair does grind a lot though, because both of these currencies are considered to be a “safety currency.” With that being the case, keep in mind that this is a risk sensitive pair, so it is likely that we will get some type of move soon.