US Dollar vs Japanese Yen Technical Analysis
The US dollar has been rising against the Japanese yen for a while now, but during Tuesday’s trading session it looks like we are a bit neutral. Everything equal. I think this is a market that is still experiencing a lot of upward pressure. And every time we pull back, I think a lot of people are entering the market looking for value.
Keep in mind that at the end of the day you will be paid via a swap and the interest rate difference is huge. Therefore, it is logical that we continue to rise in the longer term. That doesn’t mean we’re going straight into the sky and the market is currently absorbing some of the selling pressure that the Bank of Japan has put on the market, but I think they will eventually break out of that. 158 would be a target and after that you could look at moving up to the 160 level.
The 155 level below should be support, especially with the 50 day EMA racing towards it. I think this is a market that, given enough time, will not only break higher, but break the most recent swing high and go well beyond that. In fact, there are other currencies that are testing the absolute mysteries of the movement against the Japanese yen. And I think it’s probably only a matter of time before the dollar follows suit.
Being short is virtually impossible at this point. I just wouldn’t have any interest in paying the swap at the end of each day to buck the trend, if you know what I mean. That said, I view every dip as a potential buying opportunity and I am already long this market but would like to increase my position.
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This article was originally posted on FX Empire
