USD/JPY Forecast – US Dollar Continues to Attempt Stabilization Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar fell a bit during the trading session in the early hours on Monday, but then turned around to show signs of life. If the market were to turn around and recapture the 145 yen level, it would show yet another sign that the dollar may be in the process of trying to end its downtrend. It is most certainly oversold against most currencies and the Japanese and of course won’t be any different. But if we can recapture that it would be another shot across the bow, and keep in mind that there is still a massive carrier trade available here. The question is, can we get stabilization of the currencies.

If we do break above the 145 yen level, then it’s possible that we could go look into the 149 yen level. If we break down below the 142 yen level that could open up the trap door to much lower prices. The 50-day EMA is getting ready to cross below the 200-day EMA which of course is the so-called death cross, and I think at that point in time, longer term traders might look at that as negative, but I also recognize that it is a very late signal and quite often fails.

So, with that being said, I think you’ve got a situation where traders are going to continue to try to find their footing. And if we do see any type of momentum to the upside, I suspect buyers are willing to jump in and take advantage of the swap differential at the end of the session each day via the interest rate differential.

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