USD/JPY Price Forecast – US Dollar Pressing 200 Day EMA

The US dollar has rallied again against the Japanese yen on Thursday to reach towards the crucial 200 day EMA. The market has broken above the ¥105 level, and this does signal that we may be in the midst of a trend change. At this point, things will be very noisy and difficult, but I do think that this could be an interesting trade, because the Non-Farm Payroll announcement on Friday of course will have a major influence on this pair as it typically does. If we continue to see more US dollar strength, we could close above the 200 day EMA, something that a lot of traders look at to signify a trend change. Furthermore, we have recently broken above the top of a downtrend line, so that is another reason to think that perhaps we could go higher.

USD/JPY Video 05.02.21

In the short term, we are a bit overextended so I would not be overly surprised if we had a pullback. However, I think that the ¥104 level is probably going to prove to be somewhat supportive as it was so resistive in the past, and of course we have the 50 day EMA sitting right there. With that in mind, I do not necessarily look to short this pair right now. In fact, I am starting to have thoughts about going the other way, but I need the proper signal. I would prefer a pullback and a bounce but will have to play whatever the market hands be as per usual. Expect a lot of volatility during the Friday session.

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