USD/JPY Price Forecast – US Dollar Continues to Press Major Resistance Barrier

The US dollar has rallied during the trading session on Wednesday, but it looks as if the ¥111 level is an area that continues to be a bit of a headache. When you look at the longer-term charts, there is a massive amount of resistance at both the ¥111 level, and the ¥112 level. Because of this, it should not be surprising that it looks a bit like a “double top”, and it is also worth noting that there is a divergence with the MACD indicator, as shown on the chart.

USD/JPY Video 01.07.21

With that being said, I am a bit hesitant to get long of this market, but if we continue to plow higher, it is very likely that you will find more momentum in the US dollar against other currencies, or possibly even get more mileage out of buying other yen related pairs if this ends up being just a purely Japanese yen phenomenon. Nonetheless, it certainly looks as if the US dollar is picking up against almost everything, so because of that I prefer to buy greenbacks, but it may be against other currencies.

To the downside, I see the 50 day EMA as offering the first significant support, and then of course the 200 day EMA which is closer to the 38.2% Fibonacci retracement level and the most recent bounce to form this ascending channel. Keep in mind that this pair also has a certain amount of correlation to risk appetite, so pay attention to the overall markets and how they are behaving for clues as well. With the jobs number coming out on Friday, I anticipate a lot of choppy and slow behavior.

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