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

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has rallied a bit during the early hours on Thursday to reach the crucial 145 yen level, an area that of course has a lot of psychology attached to it, and of course an area that has been important more than once. All things being equal, this is a market that I think continues to see buyers jump in and pick up value any and every time we get an opportunity to play the bounce.

After all, the interest rate differential continues to favor the US dollar, and at this point in time the Bank of Japan has recently sat still at its latest interest rate decision. So, the question now will be whether or not traders have come back in and try to pick up this yield. There are a lot of cross currents around the world right now that could cause a lot of headaches. And in a significantly inherently volatile market like the dollar against the yen, it’s going to really show up in spades. If we can turn around a break above the 145 yen level, then we will challenge the 50 day EMA and then eventually the 150 yen level.

If we break down, it’s really not until we close below the 140 yen level that I think we are ready for the next leg lower. That would, of course, be a very negative turn of events and probably kick off a very big “risk off” scenario for markets around the world.

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