USD/JPY Forecast – US Dollar Continues to Break Higher Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied rather significantly during the early hours on Wednesday as we continue to see a lot of upward pressure in this pair. After all, you get paid to hang on to it, so traders are just simply staying long of this pair.

Now that we have broken above the area where the Bank of Japan intervened several weeks back. That’s not a huge surprise. We’ve seen that happen in other yen denominated pairs. So, it was probably only a matter of time before this one had that happen as well. Short-term pullbacks are more likely than not to offer buying opportunities. And I think ultimately at this juncture, the 158 level underneath is your short-term floor.

Remember, as long as you get paid to hang on to this pair, there’s no reason to sell it. Quite frankly, it’s expensive to sell this pair over the longer term. This being the case, I think any pullback is going to be looked at as a potential buying opportunity and clearing the 160 yen level is of course a psychologically important victory.

So, with that being the case, I do like the idea of staying long of this market, and I think we will continue to see the market behave in a manner that is consistent with a longer term uptrend. I don’t really have a target at the moment, other than to say that based on a measured move from the latest swing low, we could be looking at 165 yen, although I don’t necessarily think we get there quickly. I just think we’re going to continue to grind higher until we do get there.

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