USD/JPY Price Forecast – US Dollar Tries to Regain Momentum

The US dollar has risen a bit during the course of the trading session on Tuesday, as we continue to see a push higher based upon interest rate differential. The US dollar has been strengthening against the yen for a while, and now that we have had a nice pullback to the 38.2% Fibonacci retracement level, it looks like people are willing to jump into this market whatever they can, based upon the idea that perhaps we are going to challenge the ¥112 level. The ¥112 level has been significant resistance in the past, so it will be interesting to see whether or not we can break above there.

USD/JPY Video 06.10.21

To the downside, the 50 day EMA sits at the 61.8% Fibonacci retracement level, which is just above the ¥110 level. With all of that underneath, I would expect it to be a bit of a “floor the market”, especially as there is a lot of structural noise in that general vicinity as well. Because of this, I would be looking to pick up dips, and perhaps add on a move above the ¥112 level. If we were to turn around a break down below the ¥109 level, it would also threaten the 200 day EMA which of course could have an effect on the overall trend.

While I do not see that happening anytime soon, the reality is that the prudent thing to do is come up with a “Plan B” in case the trend changes. Pay attention to the 10 year note, because if interest rates start to fall, it is possible that we could see that move happen.

For a look at all of today’s economic events, check out our economic calendar.