USD/JPY Price Forecast – US Dollar Hovers at Same Level

The US dollar rallied a bit during the course of the trading session on Wednesday as we continue to see a lot of noise out there. At this point in time, the market is likely to continue to see plenty of choppy behavior as the ¥109 level has been an area that people have fought with back and forth over the last couple of days. The 50 day EMA underneath is starting to curl higher, so I do think that it is only a matter of time before that comes into play as support as well. All things being equal, the market is trying to decide whether or not we are going to go higher or lower, as you can make an argument for a nice bounce, but it is also starting to look a little bit like a bearish flag.

USD/JPY Video 20.05.21

At this point, if we break down below the 50 day EMA then the market is likely to go looking towards the ¥108 level, and if we break down below there then we will probably test hammers near the 38.2% Fibonacci retracement level. All things been equal, I think this is a market that will continue to be very noisy, and probably move more or less on bond spreads than anything else. That is the natural order of things, as money flows from one currency to another from that being the case. Ultimately, the market will likely to be noisy and as a result you need to be cautious over the next couple of weeks as we try to decide the direction going forward. If we break down below that level, then it is possible we could get a significant “flush lower.”

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