USD/JPY Price Forecast – US Dollar Volatile During Jobs Report Friday

The US dollar has rallied a bit to kick off the trading session on Friday only to turn around and show signs of exhaustion as the jobs number disappointed. With this being the case, the market is very likely to see confusion over the next several days, as traders will go back and forth on their assessment of what the Federal Reserve is going to do next. There are a lot of people that are hoping for a delay of tapering going forward, and interest rates dropping just a bit could cool off this pair a bit.

USD/JPY Video 11.10.21

Quite frankly, the ¥112.50 level above is significant resistance, an area where we have seen selling pressure previously. The market breaking above there would clearly kick off a longer-term “buy-and-hold” type of situation, but right now we are hesitating to do so, so I think it is probably only a matter of time before we continue to revert to the mean, which is essentially the ¥111 area. Underneath there, we have the ¥110 level offering significant support, so I would anticipate ºthat it would offer a bit of a floor in the market. In fact, it is not until we get below the ¥109 level that I would be comfortable shorting this market, something that would include breaking below the 200 day EMA.

I anticipate that this market continues to chop back and forth without any real clear direction in the short term, but longer-term we may see some differential between the two currencies based upon interest rate markets. Right now, interest rates are calming down a bit in the United States so that will lead to this choppy sideways action continuing.

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