USD/JPY Weekly Price Forecast – US Dollar Continues Sideways GrindingThe US dollar has rallied a bit during the course of the week to reach towards the ¥110 level but did give back a little bit of the gains to continue the sideways action.
The US dollar has rallied a bit during the course of the week to go looking towards the ¥110 level, but it has pulled back a bit in order to show that we are still not quite ready to go to the upside. All things being equal, this is a market that is trying to grind higher due to the fact that the interest rate differential between the two countries continues to diverge, suggesting that the Japanese yen will continue to be on its back foot, and therefore I think the US dollar is not necessarily strengthening, but the Japanese yen is just that soft.
USD/JPY Video 17.05.21
I know this because pretty much every other currency on my platform is stronger against the Japanese yen. This even includes the Swiss franc, which typically does not move very quickly. With that being the case, I think that we go looking towards the ¥111 which was the most recent high. If we can break above there, then we should go much higher to reach towards the ¥115 level. To the downside, the 200 week EMA is sitting near the ¥108 level. That is an area that should offer a significant amount of support and therefore I think we are looking at a move to the upside, and because of this, I think it is only a matter of time before dips get bought into, driving this pair much higher. I have no interest in shorting this market, but if we did suddenly see a lot of Japanese yen strength around the world, this would be an excellent place to do so.
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