USD/JPY, AUD/USD and GBP/JPY Forecasts – Yen Continues to Face Pressure

USD/JPY Technical Analysis

The US dollar rallied against the Japanese yen early on Friday but has given back most of those gains as it now looks like we are just going to settle. This is a range-bound market, and I suspect that probably remains the case. After all, we are threatening a major breakout and sometimes these things take a little bit of time to actually work themselves out.

If we can get above the 160.4-yen level, I think that is when we finally clear that 1990 high that we have been flirting with. Short-term pullbacks continue to be buying opportunities with the 50-day EMA sitting right around the 158 level as a bit of a floor. I like buying dips; the interest rate differential makes it attractive.

AUD/JPY Technical Analysis

The Australian dollar has actually hit a fresh new high against the Japanese yen as we have cleared the 114 level. I am bullish of this pair and I do think short-term pullbacks will continue to offer buying opportunities, not only due to the interest rate differential but the fact that this is a bit of a commodity play and of course, a play on the fact that Australia is one of the few central banks around the world that has actually raised rates recently.

Ultimately, I do think that we go looking to a much higher level, perhaps 118 yen. That is a longer-term thought, that is not anything we are going to see in the next few days, but I like owning this pair.

GBP/JPY Technical Analysis

The British pound continues to struggle at the 216-yen level against the Japanese currency, but we keep banging on the door. I think it is probably only a matter of time before we break out. If we pull back from here, the 214-yen level is an area I would watch for support. Any pullback to there and a bounce could be a nice buying opportunity as well.

If we break above the 216-yen level then it opens up a much bigger move, perhaps to 220 yen. I do think this will be one of the stronger carry trades with the Japanese yen going forward, so I watch this chart daily.

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