USD/JPY Forecast – US Dollar Pulls Back Against Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially tried to rally against the Japanese yen, but has ran into a little bit of selling pressure. All things being equal, I think this is a scenario where market participants continue to look at short-term dips as buying opportunities. The 155 yen level underneath, I believe, is the short-term floor in the market. With that being the case, it would be very interesting to be a buyer down there, assuming we get it.

If we get down to that area and bounce, then we could go higher. If we can break above the 158 level, then I think it opens up the door to 160 yen, which is the major barrier at the moment. Remember, you continue to get paid to hang on to this pair despite the fact that it is kind of jumping around right now.

We have to chew through all of that intervention noise just above to really get the thing moving. If we were to break down below the 50 day EMA, it opens up and move down to 152 yen which is an area I’m even more interested in buying. This is a one-way trade. That doesn’t mean it can’t fall. It just means that you can’t short it anytime soon. I am bullish. I will remain bullish. Even though the dollar itself might be somewhat lackluster, it’s not the Japanese yen. And that really at the end of the day is probably the main driver here as the trade pays you at the end of each session, which of course is a major factor.

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