USD/JPY Price Forecast – US Dollar Gives Up Early Gains Against Yen
The US dollar initially rallied during the trading session on Tuesday but has given back the early gains as we approached the 50 day EMA. By doing so, the market looks as if it is going to pull back towards the ¥109 level, which is an area where we have seen a bit of support previously. The market continues to see a lot of noise, as we have been going back and forth based upon the idea of potential tapering and of course concerns in China when it comes to the Evergrande situation and of course contagion in the real estate market.
USD/JPY Video 22.09.21
The Japanese yen continues to be thought of as a safety currency, even against the US dollar. With this being the case, it makes a certain amount of sense that we would see the ¥109 level tested yet again, especially as the 200 day EMA is sitting in that general vicinity. With that being the case, I think the market is likely to see a lot of choppy volatility, but if we were to break down at this point in time, it could open up a flood of selling. In that scenario, we would probably see a major “risk off move” around the world.
This is one of those times when you will see concern around the world if we kick this move off. On the other hand, if we break higher, expect the next fight to be at the 110.75 area, as it has been significant resistance previously.
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