USD/JPY Price Forecast – US Dollar Testing Support
The US dollar has fallen during the course of the trading session on Tuesday to test the ¥112.50 level. This is an area that has been important more than once, as it is supportive a couple of times, as well as resistance previously. All things being equal, this is a market that has quite a bit of bullish pressure longer term, so the question now is whether or not the ¥115 level has offered enough resistance to turn the market around yet again? It is an area that has been important more than once.
USD/JPY Video 01.12.21
The 50 day EMA slices through the candlestick that we are forming for the session, so it will be interesting to see whether or not we hang on. Keep in mind that this pair is sensitive to risk appetite as well, so we will have to wait and see whether or not the market could actually hang on. If we break down below the ¥112.50 level, it is very possible that we could plunge much lower, with an initial target of ¥110 underneath. Pay attention to the interest rate differential, if it continues to widen, then it typically helps the US dollar gain against the Japanese yen.
I suspect that by the end of this week we will have a longer-term outlook for this market that is a bit clearer, so I am especially interested in how this market closes for the week, so I will definitely be revisiting this chart over the next couple of days with Jerome Powell speaking in front of Congress, and of course the jobs report coming out on Friday as well.
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