USD/JPY Price Forecast – US Dollar Struggling Against Yen

The US dollar initially rallied during the trading session on Tuesday but as you can see the market has seen a little bit of resistance near the ¥104.50 level. This is an area that has caused some noise previously, but it is worth noting that the most recent low has gotten higher. Because of this, it seems as if the market is building up a bit of inertia to make a bigger move but right now, we do not have much in the way of clarity from the short-term perspective. This does make a bit of sense though considering that the Non-Farm Payroll number comes out on Friday, which is always a big influence on this pair.

USD/JPY Video 02.12.20

Looking at the chart, the 50 day EMA also is racing towards the ¥104.75 level, so it does suggest that sooner or later we will see some selling. That being said, this is not a market that is very clear but if you wanted to go with the longer-term trend, you most certainly would be selling short-term rallies as we have seen so much in the way of pressure. All things being equal, this is a market that will probably continue to be very noisy to say the least, especially as there are so many concerns when it comes to the global economy. Yes, we are going to get a vaccine but there are plenty of headwinds out there and of course we have a lot of lockdowns between now and then to get through before we see the actual economic benefit of the vaccine being distributed. Furthermore, the Federal Reserve is very loose with its monetary policy so that does work against the value of the US dollar.

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