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

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has bounced a bit near the 142 yen level, an area that has been important more than once during the early hours on Monday. It looks at this point as if we are going to try to break to the 145 yen level above, which is a major resistance barrier as well. It’s worth noting that Friday was an extraordinarily negative day as we had initially tried to rally but smacked into the 50-day EMA and then plunged after some poor economic data.

All things being equal though, we do have to keep an eye on the fact that the Bank of Japan has recently sat still with its interest rate decision and at this point in time is still going to be extraordinarily loose with its monetary policy, and therefore it makes a lot of sense that the Japanese yen continues to take it on the chin.

Now, it may not necessarily be the US dollar that makes the strongest trade against the Japanese yen, but it certainly can give you an idea as to how to trade yen related pairs. I do think that there will be a lot of noisy and choppy moves ahead, but as long as we can stay above the 140 yen level, I think we are still hanging on to the overall uptrend.

Anything below the 140 yen level probably shows a major risk off type of situation in the markets overall, and I think that is something that you need to keep in mind. If we do turn around and break above the 50 day EMA, then I think you will start to get a little bit more in the way of confidence in the carry trade and this pair going higher again.

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