USD/JPY Price Forecast – US Dollar Continues to Moonshot Against YenThe US dollar has rallied significantly on Tuesday to reach towards the ¥107 level. At this point, it is obvious that we are trying to change the overall trend.
The US dollar has rallied yet again during the trading session on Tuesday to reach towards the ¥107 level. That is obviously a large, round, psychologically significant figure, but at this point I do think that the market is getting a little bit stretched. Nonetheless, this is now obviously a “buy on the dips” type of situation, and therefore I think it is only a matter of time before the buyers would jump in and try to take advantage of “cheap dollars.”
USD/JPY Video 3.03.21
The 200 day EMA sits at the ¥105.50 level, and the 50 day EMA is racing towards the ¥105 level. It does look like we are trying to form the “golden cross”, but that is something that I do not pay close attention to, although some longer-term traders to use it as a signal. Nonetheless, what we are seeing is a divergence between the yields in the United States and Japan. Regardless, I think if you get a couple of negative trading sessions in this currency pair, at the first signs of support there would be people willing to jump in and pick this market up.
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To the upside, I believe that the market is going to eventually go looking towards the ¥110 level, so now at this point if you are not already long in this market, you are simply waiting for an opportunity to get involved. It is very difficult to buy this market after this move, so a little bit of patience will go a long way. I believe that the “floor the market” is probably closer to the ¥105 level now.
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