USD/JPY Price Forecast – US Dollar Slumps Against Japanese Yen

The US dollar initially lifted just a bit against the Japanese yen, but ultimately ended up falling during the Monday session. As we break below the ¥106 level, it looks as if we are going to continue to fade rallies going forward, but it is an extraordinarily tight market right now as both banks are very loose with monetary policy. Because of this, although I am very should this pair, I believe that this is a market that will continue to be very difficult to trade for anything more than a short-term trade. That is fine, you just need to know that going into it.

USD/JPY Video 15.09.20

To the downside, I believe that the ¥105 level is pretty significant as far as support is concerned, so breaking down below there of course would be difficult, and if we do break down below there I think that it sends the market looking towards the ¥104.33 level, where we had bounced from previously. I also recognize that we could see this market fall simply due to a lack of risk appetite, as there are plenty of things out there to have the markets spooked in general.

For my own trading, I have been using this more or less as an indicator, testing out Japanese strength to see whether or not I should be shorting AUD/JPY, GBP/JPY, NZD/JPY, and the like. Short-term traders may continue to fade this market though, because the 50 day EMA has been relatively reliable over the last couple of weeks as you can plainly see on my chart. With that, I more bearish than bullish but I am not necessarily expecting any type of massive breakdown.

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