USD/JPY Price Forecast – US Dollar Finds Support at Familiar Big Figure

Christopher Lewis
·2 min read

The US dollar has gone back and forth during the course of the trading session on Monday as we try to decide what to do about the ¥109 level. This is an area that has been important more than once, so it should not be overly surprising that we have found support early in the session. Furthermore, we also have the 50 day EMA sitting at the ¥108.50 level and tilting higher. In other words, we are about to see dynamic support come into the picture.

USD/JPY Video 18.05.21

If we can break above the candlestick for the trading session on Monday, then it is very likely that we go looking towards the ¥110 level, which is going to be a short-term target. If we can break beyond that, then you are looking at a move towards the ¥111 level. The ¥111 level is an area where the most recent high formed, so it would not be surprising at all to see the market try to target that area, but perhaps more importantly try to break through it. If it does, that could lead to massive gains over the longer term.

The alternate scenario is that we go back towards the 38.2% Fibonacci retracement level and break through it. At that point, we would be looking at testing the 200 day EMA and then perhaps even breaking down significantly, maybe changing the intermediate trend that we had enjoyed for quite some time. In the short term, it is obvious that the market had been a little overbought so with this I think you are probably looking at a “buy on the dips” type of situation in what will be very choppy trading.

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: