USD/JPY Price Forecast – US Dollar Continues to Show Exhaustion

The US dollar initially tried to rally during the trading session on Monday but gave back the gains as we continue to see a pressing lower. In fact, it is very likely that the market is trying to build up enough pressure to finally break down below the ¥105 level. That being said, the market is likely to see noisy trading more than anything else, but we are in a downtrend, and therefore I have no interest in trying to buy this pair.

USD/JPY Video 20.10.20

When you look at the pair, the Japanese yen has been strengthening over time, but it is a very choppy and slow move. This is because both of these are considered to be safety currencies, but ultimately the market is likely to go looking towards the ¥104 level underneath, which has been the recent bounce. Ultimately, I do think that we go through there and go looking towards the ¥102 level. The market may take some time to make that move, but ultimately, we are clearly forcing ourselves lower.

The Japanese bond markets are paying more of a return than the US bond markets, and what looks to be like an alternate reality for anybody who has been in the Forex game for more than about 20 minutes. With this, we continue to see downward pressure on the US dollar due to the massive amount of stimulus that people are expecting in America as well.

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