USD/JPY Price Forecast – US dollar rallies against Japanese yenThe US dollar rallied against the Japanese yen during trading on Tuesday, reaching as high as ¥111.30 during the European session before pulling back slightly. It looks as if there is going to be supported at the ¥111 level after the break out, so I think it’s time to start buying.
The US dollar has rallied against the Japanese yen during early trading on Tuesday, pulling back from the highs to reach down towards the ¥111 level again, an area that was previous resistance. If that level can hold, it makes sense that we would continue to go higher as it is previous resistance acting as support. I think that the market will continue to grind higher based upon more of a “risk on” type of environment, which of course this market is sensitive to. We had recently formed a “golden cross” on the daily chart, and now it looks like the longer-term traders are starting to get their way again. I recognize that there is a significant amount of resistance above at the ¥112.50 level, and of course the proverbial “wall of worry” that markets always have to climb anyways.
Short-term pullbacks should continue to offer buying opportunities, down to at least the ¥111 level, if not lower to the ¥110.50 level. I believe that fundamentals will come back into play, with the Federal Reserve and its interest rate hikes coming down the line lifting this pair of the longer-term as the Bank of Japan is nowhere near doing anything close to monetary policy tightening. That doesn’t mean that this is going to be an easy move higher, just that I think it’s what we will eventually see, so keep that in mind and keep your position size appropriate.