USD/JPY Forecast – US Dollar Continues to Find Support Against The Yen

US Dollar vs Japanese Yen Technical Analysis

As we have seen multiple times, the US dollar remains very resilient against the Japanese yen. This makes a lot of sense considering that the Bank of Japan has to keep interest rates extraordinarily low to service the Japanese debt, and at the same time, the Federal Reserve looks likely to remain somewhat tight. Jobs numbers on Friday came out stronger than anticipated, so this suggests that the Federal Reserve will have to stay tight for longer. In other words, it makes a lot of sense that we continue to go higher.

Short-term pullbacks should continue to be buying opportunities. And I look at the 155 yen level underneath as a major support level that is also picked up by the 50-day EMA. With that being said, I believe this is a scenario where traders will continue to look at each dip as value and take advantage of it. The 158 yen level above is somewhat of a resistance barrier. We did poke above it but that’s about where it looks like the majority of the intervention by the Bank of Japan was centered.

If we can break above there, then I think we go to the 160 Yen level and anything above there becomes buy and hold. Regardless I am a buyer of dips, I don’t have any interest in shorting and even if we broke down below the 50 day EMA, there is even more support in my estimation at the 152 Yen level and then again at the 150 Yen level where the 200 day EMA currently sits. So, at this point, I am either going to be long of the US dollar or I’ll be looking to buy dips. I have no interest in going short anytime soon.

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