USD/JPY Price Forecast – US Dollar Drifting Lower Against Japanese Yen

The US dollar has fallen a bit during the course of the trading session on Tuesday, as we continue to see the markets run towards the safety of the Japanese yen. All things been equal, this is a market that I think is going to try to find some type of equilibrium, maybe down at the 200 day EMA. Clearly, it looks as if we are going to continue struggling and therefore, I think we will continue to see downward pressure. Rallies at this point in time should continue to see plenty of resistance above the ¥110 level, which is a large, round, psychologically significant figure that a lot of people pay attention to. Furthermore, we also have the 50 day EMA sitting just below there and starting to turn lower.

USD/JPY Video 04.08.21

The 200 day EMA is sitting at the ¥108 level, and therefore I think that might be the target. We are starting to see the markets “slumpy” in general, as we are starting to worry about the acceleration or possible deceleration of the world’s economy. Quite frankly, the reopening trade may be running out, and therefore a lot of the momentum will probably fall in these riskier assets. While the US dollar itself is not a risky asset, in comparison to the Japanese yen it is further upon the risk spectrum. Pay close attention to the stock markets in general as there is a certain amount of correlation between risk appetite and as indices, and of course this market itself. Ultimately, I think that the market will drop given enough time unless of course we get a sudden shift in trading attitudes.

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