USD/JPY Forecast – US Dollar Continues to Find Buyers Despite Pullback

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back slightly against the Japanese yen during trading on Friday. But at the end of the day, we are still very much in a situation where market participants continue to take advantage of positive swap. Ultimately, I think this is a market that will eventually break out to fresh new highs and maybe even make a run towards 155 yen.

Short-term pullbacks continue to be buying opportunities and they certainly wouldn’t want to have anything to do with trying to short this market. After all, this is a market that has a massive positive swap, despite the fact that some people are hoping that the Federal Reserve are going to start cutting rates drastically. The reality is that the Japanese are nowhere near being able to tighten monetary policy of any note.

Yes, they did raise rates slightly the other day, but ultimately, this is not a market that I think you can short. And in fact, it looks like it’s about to rip to the upside. With this, I am a buyer of dips. I’m already a holder, so I would only be adding to positions, and I do think that 155 yen is a very real possibility. And then after that, who knows where we go, but right now, it’s clearly a one direction type of scenario. The 50 day EMA underneath, I’m using as a bit of a floor in the market. If we were to break down below that level, then I would have to rethink a lot of things but right now it certainly looks bullish.

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