USD/JPY Forecast – US Dollar Continues to Bounce Against The Yen After BoJ

US Dollar vs Japanese Yen Technical Analysis

The U.S. dollar has rallied a bit against the Japanese yen during the trading session on Friday after the Bank of Japan decided to not really do anything. And that of course has people looking at perhaps trying to short the Japanese yen based on the carry trade again. We’ll have to wait and see with this being a big sell-off, but I do think the dips continue to get bought into. Ultimately, I like the idea of buying this pair, but I also recognize that it might be a very messy affair at the moment.

The 142 yen level continues to be important, and then after that you have the 140 yen level that would also be important. If we can break above the 145 yen level, then I think the US dollar can truly take off, perhaps reaching towards the 50 day EMA. Anything above there, then I think you’ll start to see some FOMO enter the market. I’m not suggesting that this is going to be an easy move. Certainly not suggesting that it’s going to be a quick one.

But the whole idea of the carry trade is that you get paid at the end of every session. And I think that is something that a lot of people will be paying close attention to. With that being the case, I like buying these dips and I do think that eventually we start to reach higher levels. On the other hand, if we have some type of huge “risk off” event and we could based on the Federal Reserve cutting by 50 basis points, you could very well see the yen strengthen again. Anything below 140 yen for me would be a very troubling sign not only for this pair, but most markets in general. If you enjoyed the video, give me a thumbs up and subscribe.

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