USD/JPY Forecast – US Dollar Pulls Back Against The Yen
US Dollar vs Japanese Yen Technical Analysis
The U.S. Dollar has pulled back just a bit against the Japanese yen during the trading session on Tuesday in the early hours, but it looks like the 145 yen level will continue to offer a bit of support as we have already started to attempt. to bounce from here. Keep in mind that carry trade has been beaten up pretty severely over the last couple of months as the Bank of Japan came in and tightened monetary policy.
That being said, they can only do so much, and the interest rate differential will continue to favor just about anything against the Japanese yen because the Bank of Japan is painted into a corner with the massive amount of debt that is currently weighing down the Bank of Japan and the Japanese economy. So, with all that being said, I do think we are in the process of trying to bottom, but this is going to be a very noisy affair, which is typical in this pair.
However, if we were to break down below the 143 yen level, then we could really start to fall apart, perhaps reaching down to the 140 yen level. On the upside, if the market were to break higher, I think the 150 yen level is going to be a bit of a ceiling, especially as the 50 day EMA is there as well. In general, I think we see a lot of sideways action right now.
And I think people are going to start to pile back into this based upon the idea that they get paid. Now, I actually prefer other currencies against the yen, such as the British pound over the Australian dollar. But this is an excellent proxy to see how the yen will perform against multiple currencies as the biggest measure of a currency is how it performs against the greenback.
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This article was originally posted on FX Empire