USD/JPY Price Forecast – US Dollar Finding Support Against Japanese Yen

As the US dollar has pulled back a bit against the Japanese yen during early trading on Thursday, buyers have stepped in to try to support it. We are trying to form a hammer at the ¥107 level, but quite frankly it is probably only a matter of time before we drop from here as risk appetite fades. The ¥107 level is essentially “fair value” at this point and looking at the chart you can see that the market certainly seems to be attracted to this level. Ultimately, this is a market that I think will continue to find sellers on rallies and that is essentially what I am waiting on. Because of this, I am looking at the 50 day EMA with great interest, as it has offered massive resistance. I would be extremely interested in selling near that redline.

USD/JPY Video 15.05.20

On the other hand, if we break down below the bottom of the neutral candlestick during the trading session on Wednesday, that opens up a lot of selling pressure to the downside and that would have me shorting this market as well. Quite frankly, I do not think that risk appetite continues to go higher anytime soon, so I do like the idea of fading rallies when given a chance. As far as buying is concerned, I need to see a significant move above the 200 day EMA which is painted in black on the chart, and even then, I would be a bit concerned about the ¥109 level offering significant resistance. While the US dollar is considered to be a safety currency, it is not as “safe” as the Japanese yen. This might be the one market where the US dollar loses value.