USD/JPY Forecast – US Dollar Continues to See Pressure Build

US Dollar vs Japanese Yen Technical Analysis

The dollar has gone sideways for about two weeks against the Japanese yen. But what’s worth noting is that even though the Bank of Japan decided to raise interest rates, the dollar hasn’t flinched. And in fact, it just looks like we’re building up more and more pressure on the 152 yen level. This is an area that can be thought of as the surface of water that a beach ball is being held under. Once that ball breaks the surface, it should go far into the air.

If we can break above there, then it’s likely that the market will really start to take off. The market has seen the 152 yen level as a massive brick wall, and if and when we can break above there, the market can truly take off towards the 155 yen level. Short-term pullbacks will continue to attract a certain amount of attention, especially with the 150 level underneath offering so much in the way of support.

We also have the 50 day EMA reaching towards the 150 yen level. So that ties in quite nicely as well. Regardless, this is a market that I think you hang on to mainly due to the fact that you get paid due to the massive interest rate differential, which is not changing anytime soon. You will continue to get paid only in the dollar against the lowly Japanese yen. And I do think eventually this market breaks out and it goes much, much higher.

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