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

The US dollar has rallied during the trading session on Thursday but gave back the gains near the 50 day EMA. The resulting action does suggest that perhaps the recovery during the trading session on Wednesday is going to be short-lived. Furthermore, keep in mind that the pair is highly sensitive to risk appetite, so we need to pay close attention to what is going on in other markets. When you look at the longer-term chart, you can see that the ¥111 level extending all the way to the ¥112 level has offered massive resistance in the past, and I think we have reached the high point of the market as far as the uptrend is concerned.

USD/JPY Video 06.08.21

It is also worth noting that the market has been grinding away in general, so with that being the case, the market is trying to drift lower, perhaps reaching down towards the lows of the trading session on Wednesday, and then the 200 day EMA. After that, the ¥107.50 level would be another target. All things being equal, this is a market that looks as if it is running out of momentum from that massive uptrend, and therefore I think it makes quite a bit of sense that we would see a continuation of what has been going on.

Even if we do rally from here, I probably will be a buyer anytime soon. I would look for signs of exhaustion that I can fade, because quite frankly this is a market that has struggled above that resistance barrier multiple times over the last several years.

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