USD/JPY Price Forecast – US Dollar Get Hammered Against Yen
The US dollar has got absently hammered against the Japanese yen during the trading session on Thursday to reach down towards the ¥109 level. This is an area that of course is crucial due to the fact that we had recently seen a lot of noise here, and you could make an argument for a bit of a flag in this general vicinity. Nonetheless, we are still very much in a bullish run and I think this pullback was probably necessary as the market had gotten far ahead of itself.
USD/JPY Video 09.04.21
With that being said, the size of the candlestick is rather disturbing, so I think we may spend a little bit of time in this general vicinity. This area is a region where there was a lot of noise in the past, so it means that there is a lot of order flow here. Even if we break down below here, the 50 day EMA is down near the ¥108 level, so I think that also offers a buying opportunity.
To the upside, the ¥112 level is a target, but obviously we have some froth to work off in this market in the short term, so I think it may be a little bit of an underperforming when it comes to risk appetite. Pay attention to the yields in the United States, because if they do start to spike a little bit, then we could see this pair rally. This recently has been more or less a bond yield differential play, so that of course is always going to be crucial to pay attention to. All things been equal, yield differential should continue to drive this pair higher over the longer term.
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