USD/JPY Price Forecast – US Dollar Gets Crushed

The US dollar initially tried to rally during the trading session on Friday but got absolutely crushed above the 50 day EMA. Europe and Asia both sold the dollar, but it does look like a little bit of stability is coming back into play as New York gets involved. The ¥105 level is an area of support that I think will attract a lot of attention, although whether or not it holds long-term might be a completely different story.

USD/JPY Video 31.08.20

Looking at this chart, I suspect that the next couple of days will continue to be more of the chop that we had seen recently. Ultimately, we do need to make a decision, but it does not look like we are ready to do so based upon the bounce going into the US session. Furthermore, it is a Friday and a lot of traders do not like putting massive amounts of capital into play during the Friday session as you have to sit on it over the weekend and hope something stupid does not happen.

If we do break down below the ¥104.50 level that will open up the door for a massive move lower. However, I think you are still in a scenario where you will be best served looking for shorting opportunities after bounces, as the choppiness will continue as vacation season rolls along. Ultimately, this is a very erratic and short-term trading type of market, so unless you are comfortable scalping you should probably leave this pair alone. It is not until we break above the ¥107.50 level that I am comfortable buying.

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