USD/JPY Price Forecast – US Dollar Testing 50 Day EMAThe US dollar has gone back and forth on Wednesday, reaching towards the 50 day EMA. The market looks as if it is paying close attention to the ¥106 level.
The US dollar has gone back and forth during the trading session on Wednesday as we try to figure out whether or not the market is going to be able to go higher. It certainly looks as if we are running out of momentum here, so I think it makes quite a bit of sense that we would roll over again. The ¥106 level has been an area of importance a couple of times, so we are definitely getting close to an area where we may see more selling pressure.
USD/JPY Video 01.10.20
With all of that being said, this is a market that tends to move up and down based upon risk appetite. After all, the Japanese yen is extraordinarily desirable for traders when things get nervous, and therefore I think we will continue the “sell the rallies” type of scenario. The 50 day EMA has been obvious resistance over the last several months, so I think that we are likely to see more of that going forward. In fact, it looks as if there is a major resistance barrier between the 50 day EMA and the 200 day EMA.
In other words, there is a huge barrier for buyers to break out above and over. Ultimately, I do think that we eventually make a lower low, and therefore perhaps reach as low as ¥104, maybe even ¥102. I have no interest in buying this pair until we break above the ¥107.50 level, something that we are obviously not doing anytime soon. With that, I continue to look for opportunities to short this market on smaller time frames.
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