USD/JPY Price Forecast – US Dollar Fades at 50 Day EMA

The US dollar has initially tried to rally during the trading session on Tuesday but continues to find the 50 day EMA as a major barrier to get past. Because of this, the market is likely to see a lot of questions with the overall risk appetite, as this pair is highly sensitive to that level. The shape of the candlestick of course is a bit negative as well, so it looks like we may go rushing towards the ¥109 level again. That is an area where we have seen a lot of buying pressure previously, so it all ties together quite nicely.

USD/JPY Video 25.08.21

The candlestick breaking down below that level could open up a significant challenge to the 200 day EMA, which is more than likely going to continue to push even lower towards the ¥107.50 level, and then possibly down to the ¥105 level. The market is likely to see more of a “risk off” type of environment if that happens, but let us not kid ourselves here, that would be very possible considering the fact that we have seen a massive amount of concern around the world when it comes to growth and of course the reopening trade.

Ultimately, this is a market that continues to see a lot of volatility, but quite frankly we have been seeing a lot of concerns out there, so I do believe that it makes quite a bit more sense that the Japanese yen would be attractive, as the Japanese yen is considered to be a major safety currency. As long as that is going to be the case, then one has to favor the slumping of this market over the longer term.

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