USD/JPY Forecast – US Dollar Continues to Levitate

US Dollar vs Japanese Yen Technical Analysis

The dollar-yen has gone back and forth during the course of the trading session in the early hours of Tuesday, as we continue to look at the 152-yen level with great interest. This is an area that obviously has been a bit of a barrier, but at this point in time, I think the market is just building up the necessary inertia to break out.

There has been talk about the Bank of Japan perhaps intervening, but if they were to do so, that would only make me buy this pair at a lower level. The interest rate differential is far too wide for a trend to emerge to the downside unless of course, there’s some type of absolute disaster, but as things stand right now, most traders, including myself, are perfectly comfortable just sitting here collecting swap at the end of every day, recognizing that once we do break through the 152 yen level, it’s very likely that we go much higher and probably rather quickly.

That will more likely than not cause a lot of FOMO trading, a lot of short covering, et cetera. The US dollar is of course a bit choppy in general, so it’s not a huge surprise to see that we’re hanging around here, but when it comes to the Japanese yen, I just don’t like owning it against anything, let alone the greenback.

So, with that being said, I look at short-term pullbacks as buying opportunities and if we can break above the 152 yen level, I will not only get long of this market, but I will probably be somewhat aggressive about it.

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