USD/JPY Price Forecast – US Dollar Falls Again Against Japanese Yen

The US dollar has fallen a bit against the Japanese yen during the trading session on Tuesday, to reach down below the ¥111 level. The ¥111 level is an area that has been important a couple of times and begins extreme resistance that extends all the way to the ¥112 level. If we were to break above the ¥112 level, then it is a massive move to the upside just waiting to happen. That being said, I think there is so much in the way of resistance above that it is going to be very difficult to break out to the upside.

USD/JPY Video 07.07.21

To the downside, the ¥110 level is of course a psychologically important level, and an area that sees the 50 day EMA reaching towards it. Because of this, I think the market could probably find a little bit of support in that area, and therefore I think that the market will continue to trade in this ascending channel. Breaking down below the ¥110 level, the market could go looking towards the ¥109 level, possibly even as low as the ¥108 level where the 200 day EMA is reaching towards.

Keep in mind that this pair is highly sensitive to risk appetite, typically rising when overall risk appetite is good, and then of course falls when risk appetite is very poor. You can see this in stock markets, commodities, and the like. This is because the Japanese yen is typically thought of as a “safety currency”, becoming much more attractive when people are looking for some type of place to park cash. Ultimately, this is a market that is still bullish, but probably needs to pull back just a bit.

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