USD/JPY Forecast – US Dollar Pulls Back Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The market has fallen pretty significantly during the early hours on Thursday, and we continue to see a lot of noisy behavior. That being said I still think there are plenty of buyers underneath and I am looking at any pullback as a potential buying opportunity.

This would extend all the way to at the very least the 155 yen level, which now is starting to attract the attention of the 50 day EMA. Keep in mind that the interest rate differential between the United States and Japan is wide as it comes. So therefore, I think it makes a lot of sense that we could continue to see a lot of people buying into the greenback and shorting the yen. In fact, shorting the yen has been the best trade that I’ve had for quite some time. This is the epicenter of the market, but not necessarily the most bullish of the pairs. However, you have to look at the way a currency performs against the US dollar to get an idea as to whether it’s going to be weak or potentially strong.

In this case, the Japanese yen has been extraordinarily weak and one of the few things that has helped the Japanese yen has been intervention. The problem with the intervention of course is it doesn’t work and we are already threatening to break above that region given enough time. I think we do. So, with this, I’m looking at this dip as a potential buying opportunity.

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