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

The US dollar initially tried to rally against the Japanese yen but as you can see on the chart, we quickly gave up the gains. This is more noise than anything else, as we have been in such a strong uptrend for so long. Ultimately, I think this is a market that will attract plenty of attention given enough time, due to the fact that we are trying to break through the ¥103 level, an area that has been psychologically important more than once. If that is going to be the case, it opens up a move to the ¥102 level given enough time, but obviously that is more of a longer-term move.

I do believe at this point in time we are likely to see a move down to the ¥102 level, but it will more or less be a question of how quickly we get there? I am not a big fan of trying to buy this market, and I do like the idea of fading rallies that show signs of exhaustion. Given enough time, I do believe that we eventually see that happen.

USD/JPY Video 21.12.20

To the upside I see the ¥104 level as a major resistance barrier, and therefore I think it would be very difficult to break above there. The 50 day EMA sits just above it as well, and therefore it is possible that we could see that area offer resistance based upon that as well. There is a downtrend line above there as well, so ultimately, I see far too many reasons for this market to break down on rallies than to continue going higher suddenly.

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