USD/JPY Weekly Price Forecast – US Dollar Continues to See Strength Over Yen

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar rallied significantly during the trading week to reach the 50 week EMA as the interest rate differential between the two economies continues to be a major factor. The Bank of Japan has admitted that they can’t really tighten monetary policy anymore. And then the non-farm payroll announcement came out hotter than anticipated. So that all ties together quite nicely for the carry trade to return with a vengeance.

I am already long of this market, and I will continue to be as this is a situation where you get paid at the end of every day, and short-term pullbacks at this point in time, I think, end up being nice buying opportunities. The 145 yen level should be support right along with the 142 yen level and the big uptrend line. It’s really not until we break down below the 140 yen level that I would be concerned. In general, I think you’ve got a situation where traders are looking for opportunities to get long and short-term pullbacks should continue to provide that.

Over the longer term, I would not be surprised at all to see this pair go back to the 160 yen level, but that is a longer term deal, not something that I’m expecting to see any time soon. I’m long, I’ll look at pullbacks as ways to add to a position. Again, as long as we stay above the 140 yen level, I think we’re in pretty good shape, despite the fact that there will probably be volatility from time to time.

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