USD/JPY Price Forecast – US Dollar Crashes Into 50 Day EMA

The US dollar has broken down a bit during the course of the trading session on Tuesday to reach down towards the 50 day EMA. Looking at this chart, it appears that the market continues to see the area above as a major resistance barrier, especially once you get to the ¥111 level, as it extends all the way to the ¥112 level on longer-term charts. Because of this, the market is likely to continue seeing a lot of resistance above that pushes the pair back down. This will be especially true if we continue to see more of a “risk off” type of attitude, as this pair is sensitive to risk appetite in general.

USD/JPY Video 28.07.21

With that being said, the market is likely to continue seeing choppy volatility, and even if we do break down from here, I do not expect it to be some type of major selloff, just that the 200 day EMA underneath could be targeted. At that point, we would be looking at the ¥108 level, and as a result find plenty of longer-term support. Nonetheless, this is a market that is going to be very noisy and there is probably no way around that.

The candlestick for the day certainly suggests that we could go a bit lower, but it comes down to whether or not see the world feel better about the economic outlook, or if we get more fear. I think you should also take a look at the fact that the structure is starting to break down a bit, so that of course would be rather negative looking, at least from a short-term perspective.

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