USD/JPY Price Forecast – US Dollar Pulls Back From Big Figure

The US dollar has initially tried to rally during the trading session on Thursday but gave back the gains above the ¥106 level, before pulling back a bit as New York out on board. Ultimately, the market looks as if we are going to consolidate in this general vicinity, which makes quite a bit of sense as the markets have been somewhat quiet, and we are in the midst of vacation season. Furthermore, the US dollar is on its back foot as the Federal Reserve continues to dump liquidity into the system. This is especially true if you can see the stock market rally and the Japanese yen strengthen against the US dollar, which is typically not the case.

USD/JPY Video 21.08.20

At this point, I believe that the market is going to go looking towards the lows of the previous session, perhaps even the ¥104.33 level. A breakdown below that level could send this market much lower, and I do think that is a real threat given enough time. On the other hand, if we were to turn around a break above the top of the candlestick for the trading session on Thursday, then we will probably go looking towards the 50 day EMA, colored in red on my chart. At that point I would anticipate that there would also be sellers as the market would continue to see a lot of technical resistance based upon that moving average. At this point in time, I do not have any interest in buying this pair, but I do recognize that a move above the ¥107.50 level would be a significant signal of strength.

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