USD/JPY Price Forecast – US Dollar Trying to Break out Against Yen

The US dollar has rallied significantly against the Japanese yen after initially drifted lower on Tuesday. We have recaptured the 200 day EMA which of course is something worth paying attention to, as it is a longer-term technical indicator. Ultimately, this is a market that I think will find buyers on dips, because it certainly looks as if the yield differential between the two currencies is going to continue expanding. If that is going to be the case, then the pair should continue to go much higher over the longer term.

To the downside I believe that the ¥105 level is going to offer support, just as the 200 day EMA well. I also believe that the ¥106 level might be a bit problematic for the buyers as well, as we have seen this area offer quite a bit of noise as well, at least historically speaking. If we can break above there, then I believe that the market goes much higher.

Ultimately, to the downside I believe that the ¥104.50 level offer support not only due to the fact that it is the most recent swing low, but it is also where the 50 day EMA is sitting at. Ultimately, we had broken above a major downtrend line, and now it looks like ultimately, I do believe that this market is trying to make a major trend change, but that is almost always a very noisy affair. In general, this is a market that will chop around but pay attention to the 10 year note, because if we continue to see yields rise in America, that will be the thing that propels this market higher.