USD/JPY Forecast – US Dollar Continues to Bounce Around Against Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially tried to rally against the Japanese yen during the trading session on Thursday, but quite frankly, I think we are going to continue to see more noise than anything else as the jobs number comes out on Friday. While I wouldn’t necessarily jump in right here, I certainly wouldn’t short this market.

I think on some type of weakness after the jobs report, maybe the initial knee-jerk reaction, I’d be all over buying this dip because quite frankly, even though the Bank of Japan is suspected to have intervened twice now in the last week, there’s only so much they can do. The interest rate differential pays way too much for that to work for a longer term move.

In fact, the biggest problem with intervention is the only thing you can truly accomplish is slowing down the inevitable. With the Japanese seemingly stuck, they just can’t do anything about their interest rates due to the debt, I think this is a scenario where you continue to look for value in the green bank and take advantage of it every time it appears.

That doesn’t mean that this is going to be easy, and you are going to have to be very cautious. However, small positions and then adding once it works out for you is generally going to be the mantra in this pair. Underneath, we have the 50 day EMA and the crucial 152 yen level, both offering significant support, so the closer we get to those levels, the more I’m interested in getting long yet again, and in bigger size.

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