USD/JPY Price Forecast – US Dollar Rallies Towards Resistance Again
The US dollar has rallied again during the trading session on Friday to reach towards the ¥110.75 level. This is an area that continues to show a lot of resistance, so it would not be surprising to see the market rollover from here. If it does, that will drag a lot of the Japanese yen related pairs lower, as it is a strength or weakness meter for the Japanese yen overall. At this point in time, we are approaching the very top of where we have been for several months, and therefore it is not surprising at all to see a little bit of trouble.
USD/JPY Video 27.09.21
That being said, if we were to break above the ¥110.75 level, the market could very well go looking towards the ¥111.50 level. On the other hand, the ¥109 level underneath is massive support, sitting at the 200 day EMA as well. If we were to break down below there, then the market would almost certainly fall apart. That being said, I just do not see how it happens, so I think at best we are probably looking at consolidation in general.
The ¥110 level has been a bit of a magnet for price, as it is essentially “fair value” for the overall consolidation area that we have been in. It is also a large, round, psychologically significant figure, and therefore bit of a magnet for price as well. With this, I think you are looking at a market that will attract a certain amount of selling pressure in the short term, but obviously if we break out to the upside yet to change your tactics rather quickly.
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