USD/JPY Weekly Price Forecast – US dollar breaks out for the weekThe US dollar broke out above the ¥113 level during the week and is closing strong. Because of this, I think that the market will continue to be a “buy on the dips” scenario.
The US dollar has rallied significantly during the week, breaking above the ¥113 level. At this point, I think that pullbacks are going to offer value the people are willing to take advantage of, and we should then go to the ¥114.50 level, possibly even the ¥115 level. Based upon the monthly chart, I believe that we are looking at a move towards 120 young level, but obviously that will take quite a bit of work. Longer-term traders will simply hang onto this trade, using a stop loss below the ¥113 level to give us an opportunity to profit. Shorter-term traders will continue to buy short-term dips, and I do think eventually we will continue to go higher.
At this point, I believe that the bullish candle shows just how bullish this market has become as we start to focus on longer-term interest rate differentials. I think that the market underneath also has support at ¥111. Overall, this is a market that continues to see buyers on fundamentals and of course the fact that the Bank of Japan looks very unlikely to change its monetary policy. We already know that the Federal Reserve is going to continue typing, so this makes this a straightforward trade. That doesn’t mean that it’s going to be easy, and of course there will always be volatility. However, if you keep your position size realistic and of course reasonable, you can take advantage of what I think it’s going to be a nice multi-year bull run.