USD/JPY Forecast – US Dollar Continues to See Upward Pressure as BoJ Flinches

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially pulled back during the trading session, only to find support at the ¥155 level and then turned around to rocket straight up in the air. This is because the Bank of Japan essentially said that they don’t see the Japanese yen being absolutely decimated as a problem.

So, the markets just jumped all over it. That being said, I think we remain a buy on the dip market. I think most of the people that I deal with probably got flat ahead of the meeting just because there’s so many bad things that could have happened. There were a lot of rumors going around that the South Korean and US central banks were going to intervene as well, and they will eventually, if things get out of control.

But that was the green light for this thing to go looking to the ¥157 level, possibly even ¥160. There isn’t a whole lot the Japanese could do with the massive amount of debt that they have. So at this point, I’m just basically sitting here looking for some type of pullback in order to get long, recognizing that the ¥155 level is probably going to be a bit of a floor in the market, and we will continue to look at it as such.

With this, there is no interest whatsoever on my part in shorting this market, and I do think that we go much higher over the longer term, but eventually people start to take profit. Maybe we will get a day where yields drop in America and that works against the dollar. Those will be the days you’ll be looking to find value.

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