USD/JPY Price Forecast – US Dollar Shows Resistance at Same Level

The US dollar has gone back and forth during the trading session on Wednesday as the world awaited the CPI figures. As they came out essentially as expected, the inflationary pressures of the US dollar may abate just a bit against the Japanese yen. Furthermore, we had reached a significant resistance barrier, and started to turn around. All things being equal, this is a market that has a massive amount of resistance above just waiting to push this market lower, as we have seen multiple times in the past. We are seeing a widening of the volatility, which is normally not a good sign.

USD/JPY Video 12.08.21

The ¥111 level above kicks off a zone of resistance that extends all the way to the ¥112 level. It is not until we break above all of that region that I would be thinking more along the lines of a “buy-and-hold” situation. To the downside, if we can break down below the ¥110 level and by extension the 50 day EMA, it is likely that the market is going to continue to go down towards the 200 day EMA.

It is worth noting that structure seems to be breaking down, (as I suggested by that comment about volatility picking up) and therefore I do think that the market is waiting to see whether or not there is some type of major “risk off event” the gets everybody running towards the Japanese Yen yet again. If we do not get a tradable set up here, I will continue to use this as an indicator on what happens with other Japanese yen related pairs.

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