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

The US dollar fell against the Japanese yen early during trading on Friday as it was announced that President Donald Trump had contracted the coronavirus. He is presently in quarantine, and the markets got a bit of a jolt in more of a “risk off” type of attitude. This had people reaching towards the Japanese yen, and then of course the fact that the jobs number was coming out later in the day did not help risk appetite at all. With that being the case, it makes quite a bit of sense that a lot of traders sold. However, the ¥105 level has offered temporary support, which should not be a surprise either, due to the fact that it is a large, round, psychologically significant figure.

USD/JPY Video 05.10.20

All things being equal, not much has changed in the attitude of the market, as it is still a “sell the rallies” type of scenario. Because of this, I do believe that it is only a matter of time before we get involved and fade short-term rallies, as the 50 day EMA has been extreme resistance as of late. As a matter fact, once we get above the 50 day EMA there seems to be a huge barrier of resistance that extends all the way to the 200 day EMA, making this a “sell only” type of scenario. I do believe that we will make fresh, new lows given enough time, because quite frankly there are more than enough reasons to be concerned about global growth and of course risk appetite. Furthermore, Japanese bonds are starting to pay a bit more in yield then US bonds, which is almost like a scene from an alternate universe.

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