USD/JPY Price Forecast – USD Continues to Go Sideways Against Yen

The US dollar has gone back and forth against the Japanese yen, hovering around the ¥109 level yet again. This is an area that has been of great interest to traders over the last couple of sessions, and as we continue to chop around, I think the market is currently trying to determine whether or not the uptrend can continue, or whether or not the market needs to pull back even further in order to test the 50 day EMA. Remember, the 50 day EMA has attracted a lot of attention as of late, so one would think that some technical traders are paying close attention to it.

USD/JPY Video 21.05.21

Looking at the noisy behavior, you can make an argument for a potential short-term back-and-forth type of trading environment that people will be attracted to if they are range bound trader, but at the end of the day this is a market that tends to be more of a barometer for the Japanese yen than anything else. What I mean by this is that if this pair is rising, typically you get more “mileage” out of the trade going long GBP/JPY or maybe something like NZD/JPY. Nonetheless, interest rate differential should continue to be a major factor going forward, so pay attention to the bond markets. As long as yields in America continue to rise, it does favor the idea of this pair going higher, but it is worth noting that if we were to break down below the 38.2% Fibonacci retracement level is very likely that we need to go looking towards the ¥107 level.

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