USD/JPY Price Forecast – US Dollar Recovers Against Yen
The US dollar has rallied just a bit during the course of the trading session on Monday to recapture some of the gains against the Japanese yen. This is a market that has been very explosive in general, and of course has a huge correlation to the interest rate differential between the two economies. As long as we continue to see rates in the United States rise, it does make a certain amount of sense that this pair will continue to climb.
USD/JPY Video 26.10.21
With this in mind, I like buying the dips, and I do believe that the ¥112.50 level should be rather important. The ¥112.5 level caused a little bit of short-term resistance previously, but I think that the “floor the market” is probably closer to the ¥110 level, which of course is a large, round, psychologically significant figure and an area that I think will attract a lot of attention as a result. Furthermore, we have a lot of structural interest in that area as well, so it would make a certain amount of sense that not only with the consolidation from previous trading sessions come into the picture, but also the 200 day EMA in order to keep the market somewhat afloat.
The market is overbought regardless, so I do think that we need a little bit of a pullback before we manage to take off to the upside and wipe out massive resistance at the ¥115 level. You should keep in the back of your head that the ¥115 level has been important multiple times on the monthly chart, and areas like that typically do not get ignored for very long.
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