USD/JPY Forecast – US Dollar Continues to Find Support Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar is rallying in the early hours on Wednesday against the Japanese yen as it looks like we are trying to get to the 145 yen level. The 145 yen level of course is a large round psychologically significant figure and with that being the case the market is going to pay close attention to it. If we can break above there, then we could really start to take of. I think the first resistance barrier is probably the 50 day EMA, and then after that, you have a move to the 150 yen level.

I don’t really think short-term pullbacks are looked at. It is anything other than potential buying opportunities as we continue to see a lot of support around the trend line and of course the 142 and the 140 yen levels. Both of these have the potential to hold up the market quite well based on historical precedence.

So, with all of that being said, I think you’ve got a situation where traders are looking for an opportunity to buy cheap US dollars against the Japanese yen, especially now that the Japanese have decided to sit on the sidelines and not raise interest rates again. Remember that you get paid at the end of each day to hold this pair, as the interest rate swap still favors the US dollar against the yen, and should do so for quite some time, despite the recent 50 basis point rate cut from the Federal Reserve.

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