USD/JPY Price Forecast – US Dollar Continues to Retreat

The US dollar has pulled back significantly during the trading session yet again on Friday as we are now well below the ¥108 level. At this point, it looks like we will probably try to get down to the ¥107 level, which is also where the 200 day EMA looks to be racing towards. If that is going to be the case, then I think we probably will find a certain amount of value hunters in that area. After all, the market went straight up in the air, based upon yield differential.

USD/JPY Video 26.04.21

Looking at the candlestick, it certainly looks very negative but at the end of the day it is likely to continue seeing a lot of choppy behavior. At this point, I think we are going to see a potential buying opportunity eventually, but I think what we are seeing here is a market that you should not be trying to play “catch the falling knife.” With that in mind, the market needs to form some type of supportive daily candlestick like a hammer that you can jump on. It is not quite done correcting, so if you are looking to go long based upon recent price action, you need the 10 year yield to start spiking again in America.

However, if you are looking to short this market then clearly you need to get below the 200 day EMA to try to jump on a move that has been extraordinarily rapid. It was easy to see that we were overbought previously, acting on that is never simple. One clue may have been when we sliced below that massive consolidation around ¥108.5. Currently, this is going to be all about yield differential so do not trade this pair unless you have the 10 year yield in front of you.

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