USD/JPY Weekly Price Forecast – US Dollar Slams Into 50 Week EMA

The US dollar has rallied significantly during the course of the week to reach towards the 50 week EMA. We are above the ¥105 level now, which does suggest that perhaps we are trying to change the overall trend. Furthermore, it does not take much imagination to see that we are broken above a downtrend line, so I think that pullbacks at this point may very well be bought into. This is further suggested due to the fact that the US Dollar Index is trying to put up a fight as well.

USD/JPY Video 08.02.21

The US dollar has been thought of as dying for a minute now, and I do believe that there are far too many people on one-sided this trade. All it takes is some type of spark to get this thing going, but we could see a massive rip higher in the US dollar if this keeps up. It is not only positioning that I believe his way of signs, but the seemingly ridiculous amount of complacency when it comes to risk. We are not out of the woods yet, despite the fact that there are vaccines. I anticipate that what we are going to see is a sudden shift in attitude sooner or later, and that should send the dollar much higher.

Obviously, it might be a little bit difficult to gain massively against the Japanese yen itself because it is also considered to be a safety currency. However, the yields in the 10 year note in America are rising, which typically will favor the greenback in this currency pair. This pair is highly sensitive to 10 year bonds on both sides of the Pacific.

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