USD/JPY Price Forecast – dollar softens a bit after jobs reportThe US dollar dropped slightly against the Japanese yen after the jobs report came out on Friday. Quite frankly though, the action is somewhat muted as I think it was close enough for most traders to simply walk away. Because of this, I think that we do have buyers underneath and it’s only a matter of time before they get involved and start picking this pair up again.
The US dollar has pulled back slightly against the Japanese yen during trading on Friday after the jobs number missed the consensus. However, previous months were revised to the upside, which of course is good for the US economy. It looks as if not much is changed, considering that the fall was very short in duration and length. I believe it is only a matter time before market participants start to pick this market up again, perhaps reaching towards ¥112 level.
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I also see a significant amount of support near the ¥111 level underneath, so it’s likely that will offer a bit of a springboard if we do drop from here. We are entering some of the quietest trading weeks of the year, so I think we will remain somewhat range bound in the meantime, but I think that ultimately we will find buyers for this pair. The interest rate differential and the outlook for both central banks simply will demand it. Obviously, this doesn’t mean that it has to happen right away, it may take some time for the momentum to build up. Once it does though, I suspect that we will see a move towards the ¥114 level again. I look at short-term pullbacks as potential buying opportunities in this market, and I see a ton of demand just below that should continue to lift this pair over the longer-term.