Yahoo Finance USD/JPY Forecast – US Dollar Continues to Look Strong, But Pulls Back
US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back just a bit during the early hours on Thursday against the Japanese yen, and we have reached the top of the current consolidation area. That being said, this is a market that still should continue to go much higher and therefore I think it’s probably only a matter of time before we are buyers.
But I need to see some type of pullback and then a bounce to get involved again. The interest rate differential most certainly favors the U.S. dollar and will for the foreseeable future. So, this is a one way trade from what I see underneath. We have the ¥155 level offering a significant amount of support, followed by the 50 day EMA, which also will do the same.
Given enough time, the market should get a look into the ¥160 level again, but it may take a little while to get there. I’m looking for value and looking for cheap U.S. dollars to get involved. I have no interest whatsoever in trying to fight this trend, nor do I want to pay the swap at the end of the day to have the privilege of fighting the trend.
This is a one way trade as the Bank of Japan really can’t do much with the massive indebtedness that Japan finds itself in, and therefore, as long as the Federal Reserve stays relatively tight, this pair will go higher. I think at this point, things are more or less settling back down, but ultimately, we are going to go much higher over the longer-term.
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This article was originally posted on FX Empire
