USD/JPY Forecast – US Dollar Attempts Recovery Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has shot straight up in the air against the Japanese yen during trading on Wednesday after overnight trading saw one of the officials out of the Bank of Japan suggesting that they were not going to continue to raise interest rates in an unstable market environment. The Nikkei 225 lost 20% in three days, so that of course really shook the foundations of the financial world.

With this, it looks like carry traders are starting to come back into the market, but from a technical analysis standpoint, we have to pay close attention to the fact that we are testing the bottom of a major uptrend line. By doing so, we are setting up a fight right around the 148.50 yen level. For me, that’s the demarcation line of going long. While it does look rather intriguing, you can see clearly that a massive trend line has been tested by us have pulled back from.

That means I’m going to observe. I’m going to see how this closes, but as things stand right now, this might be more of a story heading into the weekend, but we definitely have made inroads into supporting this pair. I love the carry trade. You get paid at the end of every day.

And of course, at the end of Wednesday, you’ll get paid triple through most retail brokerage firms. So that does count as well. If we can get above the 150 yen level, I think that’s when we really start to see momentum build up. If we were to turn around and fall below the lows of just a couple of days ago, that would be a very, very bad sign.

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