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

The US dollar has initially tried to rally against the Japanese yen on Monday but has given back the gains in order to show signs of weakness. At this point, it is very likely that we probably continue to grind a little bit lower, maybe down to the 200 day EMA which is closer to the ¥108 level. That is an area that has been paid close attention to in the past, extending all the way down to the ¥107.50 level. If we do break down below there, the market is likely to go looking towards the ¥105 level after that.

USD/JPY Video 03.08.21

On the other hand, if we were to break above the ¥110.75 level, then I think the market is likely to go higher. That being the case, I think that the area is one that we will also have to pay attention to mainly due to the fact that we have seen a lot of selling pressure in that general vicinity as well. I think the one thing you can probably come away with this with is that the market is probably going to continue to be very choppy and therefore I think it is going to be difficult to hang onto a big position, and therefore I think what we are looking at is a short-term type of situation where we go back and forth on shorter time frames. When I look at this chart, it tells me that we are probably looking for some type of range bound system to take advantage of in this type of choppy environment with more of a look towards the downside than up.

For a look at all of today’s economic events, check out our economic calendar.