USD/JPY Forecast – US Dollar Continues to Look at Resistance

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the course of the early hours on Friday as we continue to threaten the 200 day EMA. Furthermore, we also have the 150 yen level above is a significant resistance barrier and a large round psychologically significant figure. So really at this point in time, if we can break above the 150 yen level, I think that would be a very big victory for the dollar in this pair aand it would probably send more money into the market in order to take advantage of the momentum.

Remember, this is a market that recently has seen the Federal Reserve cut 50 basis points, but also has seen the Bank of Japan finally admit that they can’t do much as far as monetary policy tightening is concerned. They had a little bit of a minor tweak as far as tightening is concerned and it sent the market into complete panic and disarray. Having said that, the Japanese of course have to worry about the massive amount of debt, so therefore they simply cannot pay higher interest rates.

It will just destroy the Japanese economy. So, with this being said, I think we’ve got a situation where the carry trade is back, and dips will continue to find buyers every time we pull back. And I think in the short term, support most certainly can be found near the 147 yen level, which is right around the 50 day EMA.

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