USD/JPY Price Forecast – US dollar rallies again against the Japanese yen on Thursday

The US dollar has rallied significantly during the day on Thursday, reaching towards the ¥112.50 level, an area that we have been discussing for some time. This is an area that I think causes quite a bit of resistance, and the fact that we are overbought right now should not be overlooked.
Christopher Lewis
USD/JPY daily chart, July 13, 2018

The US dollar has rallied yet again during the trading session on Thursday, reaching towards the ¥112.50 level. This is an area that I have talked about in the past, and the fact that we got here so quickly has me a bit concerned. It’s not that I’m ready to start shorting this pair, it’s more like I’m ready to take advantage of short-term pullbacks as value propositions. This makes sense though, because there are a lot of concerns around the world with trade wars, so this puts a bit of bullish pressure in the US dollar. Beyond that, the market also focuses on the fact that the Japanese bond market yields have inverted, meaning that the Bank of Japan is very unlikely to change monetary policy anytime soon, meaning that the interest rate differential should continue to favor the US dollar for the foreseeable future.

I believe that there is plenty of support near the ¥112 level, and most certainly at the ¥111.50 level. In general, I like these dips as value propositions, and I would add as time went forward, allowing a larger position eventually, taking advantage of what I think is going to be a strong trend going forward, but one that will obviously take it’s time to come to fruition. I believe that this market continues to see volatility, but certainly it seems to favor the upside overall.

USD/JPY Video 13.07.18

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