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

The US dollar initially rally during the trading session on Tuesday but found the 50 day EMA to be a bit too much to overcome. This is not a huge surprise, that has been the play for some time now, as the ¥107.50 level continues to be a bit of a magnet for price. However, that area also has offered a significant amount of resistance every time we have approached it lately, so the fact that we have fallen back from there is not a huge surprise. Unfortunately, it is not as simple as selling this pair and letting it run, considering that the ¥107 level or somewhere just below it, continues to offer a significant amount of support.

USD/JPY Video 22.07.20

The pair also has a major “double bottom” at the ¥106 level. If that gets broken to the downside, this pair will more than likely dropped to the ¥105 level rather quickly, followed by the ¥102 level. To the upside, we would need overcome the ¥108 level to be convincing at this point, which is where the 200 day EMA currently resides. Because of this, I think that this is a “sell the rallies” type of situation until proven otherwise. All things being equal, both of these are safety currency’s and it does not look like anybody’s looking for safety at this point, with perhaps the lone exception the gold markets, which quite frankly are probably running on anti-US dollar sentiment at this point more than anything else but clearly there are a lot of things out there that could cause fear as well.

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