USD/JPY Price Forecast – US Dollar Rallies Against Yen

The US dollar rallied a bit during the trading session on Thursday, reaching towards the ¥106.50 level and previous support. At this point, the market is highly likely to find quite a bit of resistance above at the ¥107 level, so I do believe at this point it is likely that we will have a “fade the rally” type of situation present itself. After all, we have the jobs number coming out during the day on Friday, and this pair tends to be extraordinarily sensitive to that announcement.

USD/JPY Video 08.05.20

After breaking down below the ¥107 level, the technical analysis suggests that we are going to go looking towards the ¥105 level underneath, which of course is a major large, round, psychologically significant figure and of course an area that has been important in the past. This does not mean that we have to get there tomorrow, but the reality is that we have been grinding lower for some time. When looked at through a longer-term perspective, the USD/JPY pair is grinding back and forth in a major triangle, and that has not changed recently. At this point, the pair becomes an interesting potential short, given signs of exhaustion. We may get a bit of a spike during the jobs number, but that will more than likely be sold into, especially as the 50 day EMA is starting to roll over and race towards the ¥107 level, adding even more fuel to the fire in that general vicinity.