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

The US dollar has rallied initially during the trading session on Tuesday, but then broke back down below the 50 day EMA. By doing this, the market looks as if it is eventually going to go looking towards the ¥107 level, something that makes quite a bit of sense considering that the level has been such a magnet for price. In fact, I think we are simply going back and forth between ¥107 on the bottom and ¥108 on the top. Ultimately, this is a market that is very noisy as per usual, as it has nowhere to be anytime soon. Keep in mind though that the market is sensitive to risk appetite, as both of these are “safety currency.”

USD/JPY Video 27.05.20

Looking at this chart, if we do break down below the ¥107 level, then it is likely that we go looking towards the ¥106 level underneath. On the other hand, if we break above the ¥108 level, then I think we are going to go looking towards the 200 day EMA, possibly the ¥109 level. All things being equal, this is a market that I think is more or less a short-term trading environment more than anything else, and therefore you cannot get overly hung up on hanging onto a trading position. Looking at this chart, I suspect that we are going to get more of the same back-and-forth type of trading, as we are far too tight to see some type of major move, at least in the short term.

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This article was originally posted on FX Empire

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