USD/JPY Price Forecast – US Dollar Continues Parabolic Move

The US dollar has continued to go higher against the Japanese yen as yield differentials continue to favor the greenback. At this point, there should be no doubt that we have had a massive trend change, but it is also going to be dangerous to “chase the trade.” With that in mind, so situation where we need to see some type of pullback so that we can get a decent entry. The ¥110 level could be a place where we get that opportunity, and most certainly somewhere around the ¥108.50 level would be supportive as well due to the previous flag formed there.

USD/JPY Video 01.04.21

Currently, this is a market that I think is going to go looking towards the ¥112 level, but we are so overbought at this point a pullback is desperately needed. I am the first to admit that I have completely missed this particular trade, because it happened so quickly. Nonetheless, your first job is to protect your trading capital, and one of the easiest ways to lose your trading account is to chase trades that have gone too far. At this point, it is all about being patient and waiting for your set up. I certainly would not be a seller at this point, although you can make a strong argument for a potentially devastating pullback.

All things been equal, the USD/JPY pair is going to be an indicator more than anything else, as to how to trade the Japanese yen against other currencies as the US dollar is the “measuring stick” of relative strength, so you can use this to determine whether or not you should be buying something like NZD/JPY, AUD/JPY, etc.

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