Yahoo Finance USD/JPY Forecast – US Dollar Continues to Pound The Yen
US Dollar vs Japanese Yen Technical Analysis
The US dollar rallied a little bit during the early hours on Wednesday and it looks like we are trying to break above the 157 yen level. If and when we can, then it’s likely that the market could go looking to the 158.50 level.
Short-term pullbacks continue to be buying opportunities with the 155 yen level underneath being a significant support level. The 50-day EMA sits just below the hammer from last week and therefore we need to pay close attention to that as a support level. In general, this is a market that I think continues to focus on interest rate differential more than anything else.
And that of course is a scenario where you just get paid at the end of every day. And with that, I think institutional traders will continue to hang on to this position. Furthermore, you also have to keep in mind that the Bank of Japan has absolutely no chance of tightening anytime soon. So, I do think eventually we will go looking to the 160 yen level.
If and when we break that, that could open up the next leg higher. But right now, it seems like it’s more or less a buy on the dip market that is grinding its way against all of the resistance that we have seen as the persistence of the USD strength seems to be relentless, especially against the yen as the Bank of Japan cannot tighten anytime soon with the massive debts that Japan has racked up over the years.
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This article was originally posted on FX Empire
