- The US dollar has rallied rather significantly against the Japanese yen as we continue to see a lot of back and forth noise.
- Ultimately, I think you have to pay close attention to the 142 yen level as a potential floor in the market with the 145 yen level above offering significant resistance.
- All things being equal, this is a market that I think continues to see a lot of sideways action.
And now I think ultimately, we have a situation where if we could turn around and break above the 145 yen level, then we could go looking for a move above the 50 day EMA. This is obviously an indicator that a lot of people might be watching going forward.
A Long-Term Target?
Ultimately 148 yen is a potential target for those who are looking to push this market higher. The interest rate differential, of course, continues to favor the US dollar. And with that being the case, I do think eventually we break out to the upside. But keep in mind that Friday has the non-farm payroll announcement coming. And that obviously will have a major influence on where we go next.
The interest rate differential could change quite drastically depending on what happens in the bond market. But keep in mind that the Japanese recently have had several failed bond auctions where nobody bid on their debt. That is not a good place to live, and that will certainly continue to be a major problem at this point. So, I like the idea of buying dips as long as we can hold this 142 yen level. And I do think that ultimately, we probably go looking towards that 200-day EMA above. Although it’s a process, it’s not something that’s going to be quick.
Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.