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USD/JPY Price Forecast – US Dollar Gives Up Early Gains Against Yen

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·2 min read
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The US dollar has rallied significantly to kick off the trading session on Monday against the Japanese yen but then gave back the gains to form a less than impressive candlestick. The US dollar is getting hammered against almost everything during the trading session and therefore it finally has shown itself to be one of the easiest trades across-the-board, shorting the greenback. However, it is a little bit different against the Japanese yen as interest rates come into play and it is essentially a fight between two lightweights. In other words, this pair can go higher while the dollar gets hammered against everything else, and quite frankly that would not surprise me.

USD/JPY Video 11.05.21

Underneath, we have the 50 day EMA coming into the picture to show signs of support, and therefore I think the downside is probably somewhat limited in the short term, but we will have to wait and see whether or not we can break down below the 38.2% Fibonacci retracement level. On the other hand, if we were to turn around a break above the top of the candlestick for the trading session on Monday, then it would show a lot of resiliency that allows for the market to go higher.

The one thing I think you can count on in the short term is going to be a lot of choppy behavior, and quite frankly if you are looking to short the US dollar there are easier currencies to do it against. If you are looking to short the Japanese yen, then you will have much more in the way of gains in other pairs like AUD/JPY, GBP/JPY, and even CHF/JPY.

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

This article was originally posted on FX Empire

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