USD/JPY Weekly Price Forecast – US Dollar Pierces Recent Resistance

The US dollar has rallied significantly during the course of the week to pierce the recent resistance, as we are now above the ¥111 level. We have given back some of the gains though, as the jobs number came out hotter than anticipated. That being said, the market looks as if it is trying to continue to go higher, perhaps reaching towards the ¥112 level, which is an area where we have seen massive amounts of resistance over the last several years.

USD/JPY Video 05.07.21

At this point in time, the market pulling back makes quite a bit of sense, but we obviously have a lot of bullish pressure underneath. The 200 week EMA is where we bounce from previously, and therefore I would assume there should be a significant amount of support in that area. Nonetheless, my favorite way to use this pair is to figure out what is going on with yen related pairs in general. After all, if this pair continues to rally then it shows Japanese yen weakness, and therefore I could go looking to buy other currencies that could move much quicker.

Keep in mind that the pair is highly sensitive to the idea of risk appetite, so risk appetite starts to fall off, that could send money back towards the Japanese yen anyways. Yes, the chart looks positive, but I see a lot of noise above that will continue to cause major issues. Because of this, I think it is easier to simply look at other markets for bigger moves, but I still like this as a technical indicator myself.

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