USD/JPY Forecast – US Dollar Continues to Sit a High Levels

US Dollar vs Japanese Yen Technical Analysis

The US dollar has been rallying against the Japanese yen for some time, but during the trading session on Tuesday, it looks like we are a little bit neutral. All things being equal. This is a market that I think continues to see a lot of upward pressure. And anytime we pull back, I do think that a lot of people come into the market to look out for value.

Keep in mind you get paid at the end of the day via swap and the interest rate differential is huge and therefore it makes sense that we do continue to go higher over the longer term. That doesn’t mean that we go straight up in the air and the market is currently digesting some of the selling pressure that the Japanese central bank put into the market, but I think eventually they break above it. 158 would be a target and then after that, you could be looking at a move to the 160 level.

The 155 level underneath should be support, especially with the 50 day EMA racing toward it. This is a market that given enough time, I think not only breaks higher, but breaks the most recent swing high and continues to go much further than that. In fact, there are other currencies that are testing the absolute hides of the move against the Japanese yen. And I figure it’s probably only a matter of time before the greenback follows suit.

Being short at this point in time is all but an impossibility. I just wouldn’t have any interest in paying the swap at the end of every day to go against the trend, if you know what I mean. So, with that being said, I’m looking at each dip as a potential buying opportunity and I am already long of this market but would be looking to add to my position.

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