USD/JPY Price Forecast – US Dollar Gives Back Some Gains

The US dollar initially rallied against the Japanese yen during the trading session on Wednesday but has given back the gains as we approached the ¥109 level. This should not be a huge surprise, mainly because the market has been parabolic for so long. With that being said, I do think that the market is probably due for some type of correction, and I have been saying for days that I would love to get involved in this market, but not at these extraordinarily elevated levels. Simply put, we have come way too far in way to short of an amount of time.

USD/JPY Video 11.03.21

All things being equal, I would like to see this market pullback towards the ¥107 level where I would be looking for value, and a supportive candlestick to get involved. I do believe that the trend has changed, but it has gotten way to ahead of itself at this point. For what it is worth, the so-called “golden cross” is currently happening, but the fact that we have rallied 400 pips in less than two weeks makes me a bit hesitant to jump in at these high levels. If I wish to short the yen, I will probably do it against other currencies as they may have to play a little bit of “catch-up” in the meantime. I do think that the USD/JPY pair will eventually challenge the ¥110 level, but at this point in time you would be chasing the trade which is a great way to lose money in the Forex markets. If you are already long of this market, then there is not much to do.

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