USD/JPY Price Forecast – US Dollar Spikes but Gives Up Gains

The US dollar initially tried to rally during the trading session on Friday but gave back the gains just above the ¥104 level, as the area has been important more than once and of course we have the 50 day EMA sitting right there. By pulling back the way we have, it does suggest that we are going to continue to see selling and the overall downtrend, perhaps sending the market down towards the lows again at the ¥102.50 level. The market has been in a downtrend for some time, so until something changes rather drastically, it is a bit difficult to suggest that we are suddenly going to see a massive change.

USD/JPY Video 11.01.2021

Even if we do break above the ¥104 level, I think that there is a significant amount of resistance near the ¥105 level as well, so you will need to keep that in the back of your mind. Ultimately, I believe that this market continues to fade rallies, unless of course something drastically changes when it comes to the idea of stimulus coming out the United States and the like. Ultimately, the market is likely to see a lot of noise, but in general I think that we are still going to try to work our way down towards the ¥100 level.

That being said, it is worth noting also that the US dollar is little oversold against several other currencies, so it may be a bit slow getting there. Regardless, I do not see a set up to start buying anytime soon, so I look at this as a “fade the rallies” type of situation on short-term charts.

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