USD/JPY Price Forecast – US Dollar Plummets Against Japanese Yen

The US dollar has fallen during the trading session on Tuesday as we continue to see a lot of US dollar weakness against the Japanese yen. This pair has been grinding lower for some time, and it is very likely that we will continue to reach towards the ¥105 level yet again. This is an area that has been massive support in the past, so it does make quite a bit of sense that we will have to test it. Furthermore, we have made a series of “lower highs”, which is a sign of weakness as well. With that being said, I do believe that selling short-term rallies will continue to work, and it is worth noting that the 50 day EMA has been a very reliable technical indicator as of late.

USD/JPY Video 09.09.20

Keep in mind that the Federal Reserve is working against the value of the US dollar in general, so that is something to pay attention to. I think it is only a matter of time before we get some type of flush lower, and then the question is whether or not the ¥105 level will hold? It probably will initially, but eventually I think that this pair goes below there and goes looking towards the ¥104.33 level. That was the scene of the most recent significant bounce to the upside. If we break down below there, then this pair could really start to unravel at that point. To the upside, I anticipate seeing a lot of resistance near the 50 day EMA and of course the ¥107.50 level remains the massive “ceiling” that the market has been dealing with for some time. Fading short-term rallies that show signs of exhaustion continue to be the best way to play this market.

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