USD/JPY Forecast – US Dollar Continues to Plow Higher Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar pulled back just a bit during the trading session on Friday, only to find support near the 155 yen level. The 155 yen level is of course a large round psychologically significant figure and it’s also an area where the 50 day EMA is hanging around. The 50 day EMA of course is an indicator that a lot of people pay attention to, so it does make a certain amount of sense that we have seen buyers in this area.

If we can continue to see upward pressure, I do think that we will see it. This is a pair that could go to the 160 yen level. Keep in mind that Friday is the jobs report and that the hotter than anticipated number has people piling into the greenback as they believe the Federal Reserve will do everything it can to hold off on rate cuts, and as long as that’s the case, it makes sense that the US dollar will continue to strengthen against the Japanese yen. With an interest rate differential between the two economies that you could drive a truck through, you get paid to hang on to this pair, and I think a lot of people pay close attention to that, especially institutional traders. If we can break above the 158 yen level, then we start to test the massive wick that runs up to the 160 yen level.

If we were to turn around and break down below the 155 yen level, something that I don’t see being likely happening, then we could drop down to the 152 yen level. Regardless, this is a market that I’m a buyer of dips on.

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