USD/JPY Forecast – US Dollar Levitates Against Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar was quiet against the yen during Presidents Day. We are currently sitting just at the 149.80 yen level, an area that has been brought up a couple of times in the past by myself and other analysts as an area that has a certain amount of market memory attached to it. This is an area that previously has been both support and resistance, so it does attract attention. Keep in mind liquidity would have been a bit of an issue, especially as we roll into the New York session, as most traders are just simply not at work. If we do break down from here, the market has massive support near the 50 day EMA and the 147.33 yen level.

On the other hand, if we turn around and break above the 150 yen level, then we test 151 yen, followed by 152 yen. The 152 yen level is an area that was a significant swing high, so breaking above there could rush in a little bit more along the lines of FOMO trading. All things being equal, this is a market that, given enough time, I do think breaks above there due to the fact that the Bank of Japan has very little room to tighten monetary policy.

Quite frankly, Japan’s debt level is just too much. So you can see on the daily chart here it’s just been more of a slow grind to the upside, followed by an occasional pulse of move. That is typical of any uptrend, so I don’t think anything on this chart really changes my thought process. At this point in time, I like the idea of buying dips, taking advantage of value and I think once we clear the 152 yen level, we probably go looking towards the 155 yen level. Anything above there then becomes buy-and-hold, so we’ll have to wait and see how that plays out, but I could see that happening, as there is no real argument for Japan changing its monetary policy course anytime in the near future.

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