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

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially tried to rally a little bit against the Japanese yen, but turned around to show signs of weakness at the beginning of the Monday session as the market is now approaching the 200 day EMA.

That being said, there has been a massive surge higher and I think a lot of this comes down to the idea of the Bank of Japan finally admitting that they are unable to raise interest rates anytime soon. If that’s going to be the case, then it makes a perfect amount of sense that market participants will continue to look at this through the prism of whether or not the interest rate differential is worth collecting at the end of the day. The jobs numbers in the United States came out hotter than anticipated and that of course has people questioning how quickly the Federal Reserve can cut rates.

So, with all of that being said, I think you have to look at this through the prism of trying to find value on this dip. And this is a situation where traders are looking at this through a value proposition. And perhaps even looking at the 50 day EMA as potential support. That’s assuming of course, that we even dropped that far. If we can turn around and take out the 150 yen level, I think you’ll get a lot of FOMO trading, trying to push this pair higher, but for me, I continue to buy dips.

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