USD/JPY Price Forecast – US Dollar Recovers After Initially Falling

The US dollar has fallen a bit during the trading session on Friday, reaching down towards the ¥105.50 level. However, we found a bit of support there and the market turned around to rally and form a bit of a hammer by the time New York started. Ultimately, this is a market that I think continues to see a lot of volatility and quite frankly it should, due to the fact that there are a lot of moving pieces out there that could cause more of a “risk on/risk off” type of trading environment. The world is a very unstable place right now due to the coronavirus, slowing down of economies, and of course the flooding of currency into the markets.

USD/JPY Video 24.08.20

At this point in time, the market is likely to see a lot of choppiness, so keep that in mind. However, this is a market that looks very likely to continue to reach lower, perhaps down to the ¥104.50 level. To the upside I see the 50 day EMA as offering resistance, so therefore any signs of exhaustion should continue to bring sellers back into this market. In fact, I have no interest in trying to buy this pair until we break above the ¥107.50 level, because at that point we would not only break structural resistance, but we would also break above the 200 day EMA. If we do that, then we could go as high as ¥110 level, but that seems to be very unlikely to happen anytime soon given the fact that the Japanese yen is of course a safety currency as well.

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