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

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has pulled back just a bit during the early hours on Wednesday against the Japanese yen as we continue to see plenty of support just below. The 140 yen level is an area that the market has bounced from recently. And therefore, I think we have a situation where people who continue to believe in the idea of the Bank of Japan tightening. We’ll be waiting to see whether or not the 140 yen gets closed underneath.

On the other hand, if we turn around and bounce from here, we very well could see the U S dollar pick up steam. The FOMC is at the end of the day on Wednesday, and it’ll be interesting to see how the market behaves because quite frankly, everybody already knows that the Federal Reserve is going to be cutting rates, but some people are starting to bet on 50 basis points. Some are even calling for 75, which of course is ridiculous. In this environment, if the market were to bounce from here, I do think that the 145 yen level is a bit of a target. If we can break above there, then the market is likely to continue to go even higher in general.

This is a market that I think is going to continue to be very noisy, but I think you have to pay close attention to not only the Wednesday session, but also the Friday session, as the Bank of Japan also has its interest rate decision and its press conference. So I think the next couple of days will be very noisy. And while I am looking for a position to the upside, I also recognize that this is probably something that you need to see how the dollar closes out the week against the yen before you really put money to work.

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