USD/JPY Forecast – USD/JPY JPY Continues to Power Higher

US Dollar vs Japanese Yen Technical Analysis

We are taking a look today at the US dollar against the Japanese yen as we head into the FOMC meeting. It does make a certain amount of sense that the U.S. dollar would continue to strengthen against the Japanese yen, as the interest rate differential between the two currencies is wide enough to drive a truck through.

It’s very likely that the Federal Reserve will remain hawkish in its attitude, and then should continue to put upward pressure on the greenback against the Japanese yen, specifically due to the fact that the Bank of Japan simply cannot do anything about the interest rate situation. So, with that being said, the market is likely to continue to be a buy on the dip scenario, and I do think that eventually we will go much higher with this.

I ultimately believe that we will not only reach the ¥160 level, but I think we will probably break above there, underneath the ¥155 level. It seems to be an area of significant support, and I think that remains the case going forward. If we were to break down below their, then the 50 day EMA comes into the picture right above the crucial ¥152 level.

I’d be very surprised to see that happen though. And I think at this point in time, even though it looks as if the Bank of Japan may have intervened on Monday, the market’s ready to take them out. So, without being the case, I think it has just offered a situation where traders are going to be willing to step in and take advantage of cheap dollars against a feckless yen that just simply can’t do anything to save it.

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