USD/JPY Price Forecast – US dollar breaks out against Japanese yen early

The Federal Reserve has been relatively reliable in keeping the interest rate situation in the “sweet spot” for equities traders, but at the same time has given the US dollar a boost overall. I think that’s going to continue to be the case, as it is a bit of a “double whammy” for a pair that has recently broken above the downtrend line that formed the symmetrical triangle that had been so important. At this point, I believe that the market will continue to see a lot of volatility, but ultimately I do think that this pair will continue to go to the ¥114.50 level above which has been important more than once and of course is a longer-term target of mine anyway. I believe in buying dips, and I think that will continue to be the way forward. I see support at various levels underneath, especially at the ¥112.50 level and the ¥112 level as well. Ultimately, I think that it’s only a matter time before buyers would return based upon value.

I think that breaking above the ¥114.50 level will take a lot of work, but I think we eventually go above there as well. After all, the interest rate differential between the economies remains very high, and the Federal Reserve is the only major central bank on a tightening cycle. The Bank of Japan on the other hand is light years away from doing anything like that, so I believe that it continues to make sense that this pair rallies. Look at pullbacks as potential value.

USD/JPY Video 27.09.18