USD/JPY Price Forecast – US Dollar Finds Support

The US dollar has drifted lower during the trading session on Friday but has turned around to form a bit of a hammer later in the day as it looks like the ¥104 level offers support. At this point in time, it looks like we are trying to build up some type of symmetric triangle, but at the end of the day we are still very much in a major downtrend, so I think at this point in time it is simply a matter of waiting for signs of exhaustion again. The typical trade would be to take a break in whatever direction we end up seeing give way, but there is a massive amount of resistance extending from the 50 day EMA to the 200 day EMA, so I believe that it is going to be extraordinarily difficult to break through that entire area, which extends all the way to the ¥106.50 level.

USD/JPY Video 30.11.20

On the other hand, if we break down through the bottom of the candlestick for the trading session on Friday, we could go drifting towards the ¥103.50 level, followed by the ¥103.25 level, which could open up even more negativity down to the ¥102 level. At this point in time, I do believe that the Federal Reserve will continue to be the most important factor in this pair, as it looks likely to continue to see negativity and liquidity measures weighing upon the greenback. Overall, the Japanese yen could get bid due to a safety trade as well, so all things being equal I think there are plenty of reasons to expect this pair to find sellers.

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