USD/JPY Forecast – US Dollar Continues to Grind Against Yen

US Dollar vs Japanese Yen Technical Analysis

You can see that we have initially tried to rally a bit during the trading session on Monday, but it does look like we are giving some of that back. It’ll be interesting to see traders trying to push this towards the 149.8 level. That’s an area that previously has been very important and therefore, I think you have to pay close attention to it. If we can break above there, then it opens up a move to the 151 level. Short-term pullbacks at this point in time will continue to see the 50-day EMA offer a little bit of support, followed by the 147.33 level. That’s an area that was a bit of a swing low as of late. This is an area that a lot of people will be paying close attention to.

That being said, I do think that it is probably only a matter of time before value hunters would come in on these pullbacks. Quite frankly, the interest rate differential between the United States and Japan is just far too great to think that a selling opportunity really has some type of major long-term influence. This week, we do have the Bank of Japan, but quite frankly, they are at best going to move interest rates back to zero. In other words, they won’t be positive, they won’t be negative.

The interest rate differential between the United States and Japan continues to be wide enough to drive a truck through, and I think that’s the main story here. I’m just looking for short-term pullbacks to take advantage of. The 152 yen level above has been a major swing high, and I think that’s the goal eventually, but we’ll have to wait and see how we get there. Buckle up, this could be an issue for several days, but the overall trend should continue to be the same bullish pressure that we have seen for a while. The selling of this pair is almost impossible to do so, and therefore I think you are simply looking for opportunities.

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