USD/JPY Price Forecast – US Dollar Rallies

The US dollar has rallied significantly during the trading session on Tuesday, reaching towards the 50 day EMA. The market is trying to break significantly above the ¥109 level, and that should send this market towards the ¥110 level. That’s an area that has been major resistance as of late, and it should be noted that on the longer-term charts it is essentially “fair value”, in the sense that the market has been bouncing between the ¥105 level on the bottom and the ¥115 level on the top.

USD/JPY Video 05.02.20

The market has held firm at the bottom of the overall uptrend channel, which is something that is worth paying attention to, and it does suggest that we should see more of the same. Ultimately, pullbacks offer buying opportunities, as long as we can stay above the bottom of the uptrend channel. Furthermore, it should be noted that the bounce was from the 200 day EMA, and therefore it’s likely that the buyers will continue to jump in. Ultimately, if the market can break above the ¥110 level, then it’s likely that the market should go looking towards the ¥111 level after that. Longer-term, at least on a major “risk on” market, we could eventually try to go looking towards the ¥115 level but that would be a call for late this year. That being said, pay attention to the stock markets as this pair seems to be very sensitive and highly correlated to the S&P 500. If the market were to break down below the 200 day EMA, it’s likely that we could go much lower, and perhaps open up the door to the ¥105 level.

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