USD/JPY Price Forecast – US Dollar Pulls Back Against Japanese Yen After G7 Disappoints

The US dollar has pulled back a bit during the trading session after initially trying to rally above the 200 day EMA. The G7 had a conference call that ended up being a very disappointing event, as the G7 suggested that they were “watching closely” the markets. Ultimately, I believe that the market had hoped that there was going to be a statement that central banks around the world were going to do a coordinated move to liquefy the markets and perhaps even step in and buy certain things.

That being the case, the market looks likely to continue to go back into a “risk off” type of environment, and if we break down below the bottom of the Monday session, it’s likely that the pair drops down to the ¥105 level given enough time. I think that rallies at this point will continue to sell off, as the 200 day EMA is crucial and of course the 50 day EMA above would cause resistance as well.

USD/JPY Video 04.03.20

In short, I believe that this is essentially a market that is a “fading the rallies” type of situation and the Japanese yen of course will be favored as one of the world’s premier safety currencies. We have recently seen the ¥110 level act as a magnet for price, but that’s not a huge surprise considering that we have a larger consolidation area between the ¥105 level on the bottom and the ¥115 level on the top. At this point, I do think that we are going to see continued pressure to the downside.