USD/JPY Weekly Price Forecast – US Dollar Stalls at Familiar Level

The US dollar has gone back and forth during the course of the trading week, as we made a fresh high, only to give back the gains just above the ¥111 level. Because of this, I think that the market is more likely than not to show a bit of confusion at this point in time, as the market is likely to continue to see a lot of questions asked about the Federal Reserve, especially as the Core PCE number came out just a little bit lighter than anticipated. If that is going to be the case going forward, it more than likely keeps the Federal Reserve on the sidelines.

USD/JPY Video 28.05.21

Nonetheless, at the very least this market looks as if it is setting up for a little bit of a pullback, which is probably reasonable considering how important the ¥111 level has been in the past. To the downside, the 200 week EMA is sitting at roughly ¥108, which is roughly where the 38.2% Fibonacci retracement level is, and the 50 day EMA on the daily timeframe. I think more than anything else, the market is likely going to be choppy and rudderless, especially as we are in the midst of summer.

The next couple of months will be all about whether or not the Federal Reserve can do any type of tapering, which at this point in time is still a bit of an open question. I do think that the market will probably have a lot of noise over the next couple of months, so I am very comfortable with the idea of this market more or less jumping into a consolidation range.

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