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

The US dollar has rallied significantly during the trading session on Thursday to reach towards the 50 day EMA. Having said that, we turned around at that point and gave up gains as we have seen more than once. Ultimately, this is a market that continues to see downward pressure overall, as we are settling into a rather tight trading range. This makes sense, because the US dollar is getting beat up due to quantitative easing against most other currencies around the world.

USD/JPY Video 11.12.20

The biggest problem with this pair is going to be the fact that the US dollar continues to strengthen against the Japanese yen in a “risk off bid”, as this pair does tend to rise when stock markets and risk appetite does. However, with the weakening US dollar in general it creates a significant “push/pull scenario.” With that being the case is difficult to imagine a scenario where it is going to be easy to have a clean break in one direction or the other.

The shape of the candlestick is a bit of a shooting star, suggesting that we are in fact going to go lower. The 50 day EMA offering resistance as per usual, with the downtrend line just above there, and then finally the 200 day EMA. I think there is far too much to overcome at this point, so I still look at rallies very skeptically. To the downside, the ¥103.70 level will be supported, and then underneath the ¥103.25 level will be next. After that, the market is likely to go down towards the ¥102 level. All things being equal, it is about fading short-term rallies.

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