USD/JPY Price Forecast – US Dollar Drifts Lower Against Japanese Yen

The US dollar has tried to rally during the trading session on Tuesday but continues to see a lot of resistance in the form of the 50 day EMA. Although Monday was a relatively strong session, at the end of the day we ended up just below the 50 day EMA which has been significant resistance more than once going back, and at this point I think it is likely that the market will pay quite a bit of attention to the indicator. Even if we were to break above the 50 day EMA, the ¥106 level is now offering resistance, and most certainly the ¥107 level will be. In fact, it is not until we get above the ¥107.50 level that I would be willing to buy this pair.

USD/JPY Video 07.10.20

To the downside, the ¥105 level offers a significant amount of support, but we have broken through there are a couple of times in the past so it is likely that we will continue to try to slice below it and go lower. Ultimately, I think we will make a fresh, new low but that does not mean that it is going to be a quick move. Quite frankly, I think this is more or less going to be a major grind lower, and that will mean that fading the rallies on short-term charts will probably continue to be the best way to trade this market, for little bits and pieces as you go along. I would not get overly aggressive, but then again, I would not expect a huge move anytime soon.

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