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

The US dollar has initially tried to rally during the trading session on Friday, but it looks as if the Japanese yen is fighting back. When you look at the market, it does not take a lot of imagination to think that we are building a bullish flag, which makes quite a bit of sense considering that we have such a major resistance barrier above. The ¥115 level is a major barrier, based not only upon recent action but also the monthly charts. If we can break above there, then I think it becomes more of a “buy-and-hold trade” yet again.

USD/JPY Video 15.11.21

Looking at this chart, the 50 day EMA is sitting at the ¥112.50 level and is curling higher. That has a certain amount of influence on the market, as a lot of traders will look towards the 50 day EMA as dynamic support. The ¥112.50 level is an area that has already proven itself to be important historically, so this might be where we are trying to get back to in order to continue building the flag.

If we break down through that level, then it is possible that we could go looking towards the ¥110 level, which is even more supportive, especially with the 200 day EMA sitting there. The 200 day EMA of course is a longer-term indicator that a lot of people will pay close attention to. That being said, I think a simple pullback more likely than not will offer a short-term buying opportunity as we have seen over the last couple of weeks, especially as the interest rate differential between the two economies divergence so drastically.

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