USD/JPY Forecast – Dollar Continues to Look Upwards

US Dollar vs Japanese Yen Technical Analysis

I think at this point, we are simply looking at a market that’s consolidating before a much bigger move to the upside. Ultimately, the Japanese yen really can’t fight the pressure. There may be the occasional intervention, but really at the end of the day, it doesn’t matter. We’ve already seen that on Monday.

Underneath we have the 155 yen level offering significant support. A lot of pundits that I truly respect believe that the US dollar could be going all the way to the 200 yen level by the time the super cycle is done. That doesn’t mean that it happens tomorrow, it just means that eventually that’s where we’re going. And if you look at historical charts, we’ve been there before, it’s really not that big of a deal.

The Bank of Japan simply cannot raise interest rates enough to make the yen attractive because there’s just too much debt in Japan. They literally have been a bug looking for a windshield for years and looks like they’ve finally found it. Short-term pullbacks, especially those caused by volatility in the FOMC meeting, will more likely than not end up being buying opportunities.

The 50-day EMA sits just above the 152 yen level, an area that I don’t think we will break down through again. If we did, that would be substantial. But even then, I’d have to see what the fundamental situation is. At this point in time, I’m a buyer of dips in anything denominated in yen, because quite frankly, I think this is a market that’s got a long way to go. And we could be talking for many years.

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