USD/JPY Forecast – US Dollar Continues to See Support

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has gone back and forth during the course of the trading session in the early hours of Monday as the Japanese yen is at least putting up a little bit of a fight. The market certainly sees a lot of support underneath current levels, especially near the 160 yen level, which is where the Bank of Japan had previously intervened. Quite frankly, this is a market that doesn’t have a whole lot to shake up in the next 24 hours, mainly due to the fact that the economic calendar is almost blank.

So with that being said, the market is likely to continue to go higher but I also recognize that we may have to digest some of these gains. Either way I won’t sell this pair because I don’t want to pay for the privilege. Remember there’s a wicked differential between the two interest rates and therefore you have to pay that swap at the end of every day if you choose to short this pair.

Even if we were to break down below the 160 yen level, I think the 158 yen level would be an area that a lot of people would be paying attention to as it previously has been important. And of course, the 50 day EMA is now approaching that level. On the upside, I do think we make the 165 yen level as a bit of a target. And I do think we will get there over the next, perhaps several weeks or maybe even a couple of months. It is the middle of summer, so things do typically slow down a little bit, but overall, this is still an upward market.

For a look at all of today’s economic events, check out our economic calendar.