USD/JPY Forecast – US Dollar Continues to See Strength Against The Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the course of the trading session on Monday as we have broken above the candlestick from the Friday session, suggesting that momentum is picking up in this currency pair.

All things being equal, this is a scenario where the US dollar just simply pays much more in the way of interest than the Japanese yen, and I do think we continue to go higher. However, I don’t necessarily think that you need to chase the market. I think you need to look for short-term pullbacks in order to find support. The 160 yen level is a large round psychologically significant figure, and it’s an area where we had seen the Bank of Japan intervene.

So, I do think there’s a lot of market memory there and that market memory will of course be a big factor. The 160 yen level I think is going to be the scene of quite a bit of pushback on any selling, but the one wild card here, of course, could be the fact that the Bank of Japan could intervene but that is a short-term thing. That’s not a longer term thing as we have seen previously, and I think that would just have me looking to buy dollars at even lower levels and hanging on for even longer. Interest rates in the United States continue to outpace Japan by a country mile, and therefore I think you continue to see this market go higher.

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This article was originally posted on FX Empire

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