USD/JPY Price Forecast – Us Dollar Gives Up Early Gains

The US dollar has initially tried to rally during the trading session on Tuesday but gave back the gains as the ¥114 level continues offer significant resistance. All things been equal, this is a market that seems to be consolidating into the new year, which is not a huge surprise considering that the market has been working off a massive move higher. Beyond that, the ¥115 level is a significant amount of resistance over the last several months, so it is worth paying attention to. If we were to break out above the ¥115 level, it is very likely that we could go much higher.

USD/JPY Video 15.12.21

The market also seems to have a significant amount of support near the ¥112.50 level, an area that has been important more than once. The 50 day EMA is in between here and the ¥112.50 level, so it is worth paying close attention to the fact that could offer short-term support. All things been equal though, this is a market that I believe will probably continue to be very noisy and sideways more than anything else. As we head into the holiday season, there will be less and less trading involved, so a lack of momentum makes the most sense.

The shape of the candlestick suggests that we probably have more trouble above than anything else, so I am looking at this through the prism of fading rallies that take off to the upside. If we were to break down below the ¥112.50 level, at that point I would anticipate that this market would go looking towards the 200 day EMA underneath which is currently sitting at roughly ¥110.50.

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