USD/JPY Forecast – USD/JPY JPY Continues to Look for The Floor

US Dollar vs Japanese Yen Technical Analysis

The U.S. dollar has gone back and forth during the course of the early hours on Monday as we continue to do everything we can to stabilize. We initially fell towards the 200 day EMA a couple of days ago and then turned around to form a bit of a hammer. Now I think we’ve got a situation where the 155 yen level above is the barrier to recovery. If we can break above that, then we can go much higher, perhaps reaching towards the 50 day EMA. If we were to clear that, then the 160 yen level is your target.

On the other hand, if we break down below the 152 yen level, it could open up a move down to the 150 yen level, which of course has a lot of psychology attached to it. That being said, the market is going to continue to be very noisy and choppy, and therefore I think you have to be a bit patient, but the interest rate differential does pay you at the end of each session, and that is something that a lot of people will be paying attention to.

In general, I expect short-term noise, but I don’t have any interest in shorting this pair. I don’t want to pay my broker for the privilege of holding on to the Japanese yen, which even though there are talks about a potential rate policy change, we are light years away from the Japanese actually being able to strengthen their monetary policy with any type of real gusto. With that being said, I remain bullish, but I also recognize that we’re at a crossroads here.

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