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

By:
Christopher Lewis
Published: Feb 8, 2021, 14:21 UTC

The US dollar has rallied again during the trading session on Monday to kick off the week against the Japanese yen.

USD/JPY

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The US dollar has rallied a bit during the trading session against the Japanese yen on Monday to kick off the week with more positivity. We are currently dancing around the 200 day EMA and that is something worth paying attention to. If we can break away from the 200 day EMA to the upside, that could kick off the next leg higher in this pair. We have clearly broken above a downtrend line, and I think we are starting to change the trend overall.

USD/JPY Video 09.02.21

This continues the US dollar strength that we have seen recently, due to the fact that yields are starting to rise in the bond market. This particular pair is highly sensitive to the 10 year interest rates from both countries, and as there is more yield to be found in the United States it makes sense that money would flow from Japan to the United States in that scenario. This is not to say that we are going to explode to the upside, rather that we probably have quite a bit of positivity.

To the downside, I see the ¥105 level as an area of potential support, as it is a large, round, psychologically significant figure. In fact, we first approached that level look like we were going to pull back. However, we simply shot straight up and have levitated since then. I do believe that the market is trying to make some type of statement to stay above the 200 day EMA, which of course attracts a lot of attention from a longer-term standpoint, so if we can break above the candlestick from Friday, it is possible that we would see more momentum to the upside in this market. If we pull back, I believe that the ¥105 level and the ¥104 level both offer potential support.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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