USD/JPY Price Forecast – US Dollar Continues to Struggle Against Japanese Yen

The US dollar rallied a bit during the trading session on Monday, but then gave back the gains near the 50 day EMA which continues to cause issues. Ultimately, this is a market that I think will drift lower, perhaps reaching towards the ¥105 level. That is an area that has been significant support, and therefore think it is only a matter of time before the buyers would jump back into that area. If we break down below the ¥105 level, it is likely that the market goes down to the ¥104.33 level which was the recent low.

USD/JPY Video 08.09.20

Beyond that, the highs near ¥107 could cause significant resistance as well, so I think at that point selling makes quite a bit of sense. Ultimately, this is a market that is grinding its way lower, so I continue to look at this as a “fade the rallies” type of scenario, as it has been relatively reliable. Even if we break higher, the absolute “ceiling in the market” is closer to the ¥107.50 level where we have structural resistance as well as the 200 day EMA in that general vicinity.

With that being the case, I do think that we continue to see a lot of negative pressure on the US dollar, due to the Federal Reserve and of course more of a “run towards safety” if we continue to see concerns as well. In other words, this could be a “lose-lose” situation. Expect choppiness, but I still favor the downside going forward.

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