USD/JPY Price Forecast – US Dollar Respecting 50 Day EMA

The US dollar rallied a bit during the trading session on Friday in early hours but continues to struggle near the 50 day EMA. With that in mind, this is a market that is looking for some type of external influence to make a decision. With that being the case, I believe that we continue to see a lot of choppy back and forth action, but more of a “fade the rallies” type of scenario. Even if we do break out to the upside, I believe that the 200 day EMA will offer massive resistance, which is sitting just below the structural resistance barrier at the ¥107.50 level. One thing you will notice over the last couple of months is that the region between the 50 day EMA and the 200 day EMA has offered a nice selling buffer.

USD/JPY Video 14.09.20

The pair does tend to move right along with risk appetite, and will drop if there is a sudden panic out there, although maybe not quite as much as the NASDAQ 100, GBP/JPY, etc. Nonetheless, if we do start to see a lot of “risk off behavior” out there, then this pair probably goes looking towards the ¥105 level. The range has been very tight as of late, but currency pairs cannot go sideways forever, so this suggests that we will in fact see a significant move rather soon. Once we get that move, it should have some follow-through based upon inertia more than anything else. In the meantime, this is a short-term trading environment.

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