USD/JPY Price Forecast – US Dollar Continues to Look Upwards

The US dollar has initially fallen during the trading session on Wednesday, pulling back from some of the parabolic move we had seen during the previous session. However, we have turned around rather quickly to show signs of strength. Ultimately, this is a market that should continue to go higher, as the ¥115 level has been a major barrier for this pair going back multiple years. Now that we are above that level, then it is likely that we will continue to go much higher. In fact, it is very likely that we go looking towards the ¥117.50 level.

USD/JPY Video 06.01.22

To the downside, the ¥115 level should offer significant support, and as a result any move towards that area will almost certainly pick up quite a bit of attention. The market will continue to see a lot of chasing at this point in time, due to the fact that the breakout is something that is so obvious and of course people will be paying close attention to it.

Keep in mind that this market is highly sensitive to risk appetite, so pay attention to that as well but at this point in time it looks like people are putting money to work for the new year, and that in and of itself should help this pair. Interest rates in the United States strengthening of course help this pair as well, as the Japanese bond yields are so minuscule and of course the Federal Reserve is looking to taper, which should in theory drive interest rates higher going forward as well. Ultimately, buying on the dips is how I am playing this market.

For a look at all of today’s economic events, check out our economic calendar.