USD/JPY Price Forecast – US Dollar Pulls Back

The US dollar has fallen a bit during the trading session on Tuesday against the Japanese yen, but quite frankly this is a market that has been overdone for some time. When I look at the chart, you can see that the last several candlesticks on the daily timeframe have formed wicks to the upside, telling me that this market is getting a bit exhausted. That does not necessarily mean that you should be a seller of the market, but you should be aware the fact that a pullback is probably necessary.

USD/JPY Video 24.03.21

That being said, I think that every time we get to new handle, there will probably be people willing to jump in and pick up a bit of value. For example, the ¥107 level would be an area where I think there would be plenty of buyers, and then of course the ¥106 level. The ¥106 level will more than likely features the 50 day EMA by the time we would get down there, so I find that to be one of the more interesting places to get long of this market.

On the other hand, we could just kill time in this area for even longer, eventually breaking towards the ¥110 level. Either way, I have no interest in shorting this market because quite frankly this market has been very strong for a reason, namely the fact that the interest rate differential between the two countries continue to see a widening. With that in mind, I am simply sitting on the sidelines to look for opportunities to get long in what has been an obvious shift.

For a look at all of today’s economic events, check out our economic calendar.