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

The US dollar has rallied a bit against the Japanese yen to kick off the trading session on Wednesday, but we have also seen a bit of a pullback as the market looks as if it is struggling to continue showing signs of strength. That being said, the market has been stabilizing over the last couple of days, which is quite frankly what it needs to do. This is especially true considering that the jobs number is coming on Friday, which will have a major influence on what happens next.

USD/JPY Video 02.12.21

The pair has been bullish until recently when the new coronavirus variant suddenly change everything. That being said, it is also worth noting that the ¥115 level above is massive resistance, so it does make quite a bit of sense we have pulled back from there. In the short term, the ¥112.50 level looks to be supportive, so it does make a certain amount of sense that we are hanging about the 50 day EMA currently.

That being said, the market is likely to continue seeing a lot of noisy behavior, but if we break down below the ¥112.50 level, then I will more than likely anticipate a move down to the ¥110 level. Anything below there then change the overall trend, which could break down quite significantly. I believe that the next couple of days will give us a bit of a “heads up” as to where we go next. It is worth noting that the bond market will have its say as well, so pay close attention to the interest rate situation.

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