USD/JPY Price Forecast – Us Dollar Pulls Back Against Yen

The US dollar has rallied a bit against the Japanese yen during the trading session on Thursday, as we may have a little bit of consolidating to do. The market has been quite noisy as of late, and now the question is whether or not the 50 day EMA will attract enough attention to keep this market afloat?

USD/JPY Video 10.12.21

The US dollar tends to rally against the Japanese yen in times of “risk on”, as the Japanese yen is considered to be the ultimate safety currency. When you look at the longer-term chart, the ¥115 level above is a massive barrier to overcome, and a lot of people will be paying close attention to it. If we could get above there, then the pair becomes more of a “buy-and-hold situation”, as it could go to the ¥117.50 level, maybe even the ¥120 level. Obviously, that would be a very big move and therefore I am not necessarily looking for that to happen in the short term, but I do recognize that we more likely than not will at least attempt to get back towards the highs.

To the downside, the ¥112.50 level continues to be an area of significant interest, as we have bounced from there couple of times, and at this point in time it is likely that it will be a short-term “floor the market”, and therefore I think what we have here is a situation where it is a buy on the dips trade.

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