USD/JPY Price Forecast – US Dollar Showing Signs of WeaknessThe US dollar fell on Friday, breaking down below the ¥105 level again. If we can break down below the Tuesday candlestick, that could make things interesting.
The US dollar has pulled back a bit during the trading session on Friday, as we broke down below the ¥105 level. If you break down below the Tuesday candlestick, then you start to have a negative move just waiting to happen. After all, there was a huge push higher after they started to talk about the vaccine potential. With that, there is a major “risk off” type of move but if that gives way, we could see this market drop all the way back down to the ¥104 level, possibly even down to the lows that we were at to start the week out.
USD/JPY Video 16.11.20
When you look at the chart, we have been testing the 50 day EMA multiple times only to fail, and I think that is going to continue to be the case. I think the area between the 50 day EMA and the 200 day EMA should continue to be massive resistance and treated as such. Obviously, if we were to turn around a break above the ¥106 level, possibly the 200 day EMA, then you could have a serious trend change. However, that does not look to be the case as I record this and quite frankly it is hard to imagine that everybody suddenly gets extraordinarily bullish, because it is obvious that coronavirus is starting to pick back up, and we are seeing in multiple countries around the world locked down.
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Lockdowns could be coming to the United States again, and that of course will work against the value of the dollar in the face of the Japanese yen which is a safety currency.