Yahoo Finance USD/JPY Forecast – US Dollar Continues to See Strength Despite Pullback
US Dollar vs Japanese Yen Technical Analysis
The US dollar pulled back just a bit during the trading session here on Thursday, as we may have gotten a little bit overdone, but really at this point, I think this is still a market you’re looking to buy dips in. And I do think that the 160 yen level will be interesting to pay close attention to. After all, there should be a lot of market memory there as the Bank of Japan intervened at that point. And it was a significant resistance barrier.
Now that we are pulling back towards it, the question is whether or not we hold that as support. Even if we don’t, the 158 yen level underneath there should end up being supported as well. So, I think you have a situation where sooner or later, you’re going to be a buyer of this pair. That does make a certain amount of sense considering that the interest rate differential continues to get you paid at the end of every session, and I think that is something that you cannot overlook.
The interest rate policy out of Japan will remain very, very loose as they have no other choice. Japan’s debts are just so astronomically high that there are entire days where bonds don’t move, and the only buyer is actually the Bank of Japan. So, with that being the case, I don’t really see how the yen strengthens for any significant amount of time and anytime we pull back, it’s just an invitation to buy more.
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This article was originally posted on FX Empire
