The US dollar has rallied slightly against the Japanese yen again during the trading session on Tuesday, but still has a lot of resistance just above. At this point, the market is likely to see sellers on short-term rallies, as the Federal Reserve continues to flood the market with US dollars. With that being the case, it is likely that we will continue to see the US dollar lose a bit of value over time, and therefore I think it makes sense that we pull back from here and continue to grind towards the lows that we had seen previously.
At this point, it is difficult to imagine a scenario where the US dollar strengthens over the longer term, but ultimately it is only a matter of time before the market goes looking towards the lows again.
USD/JPY Video 05.08.20
With all of that being said, the market is likely to see a lot of volatility, but that is not going to be anything new considering that this is a Non-Farm Payroll week. With that in mind, we may just simply drift a bit lower heading into that announcement. To the upside, I see a lot of resistance in the form of the ¥107 level, and most certainly the ¥107.50 level which has already proved itself to be crucial. The 50 day EMA is just above, so that could also come into play on any type of bounce. All things being equal, I think that the market will eventually test the lows again.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Crude Oil Price Update – Long-Term 50% level at $41.72 Possible Trigger Point for Upside Acceleration
- Crude Oil Price Forecast – Crude Oil Markets Continue to Put Traders to Sleep
- Natural Gas Price Fundamental Daily Forecast – The Heat is On; Reaction to $2.149 Sets the Tone
- U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 93.245 Sets Near-Term Tone
- Gold Price Forecast – A Potential Spike High This Week
- eBay Could Roll Over Into Intermediate Correction