USD/JPY Weekly Price Forecast – US Dollar Pierces Major Resistance Barrier
The US dollar has rallied to break above the ¥115 level, an area that has been significant and massive resistance, therefore suggesting that we are ready to go much higher. All things being equal, any pullback at this point in time will probably offer value that people are willing to take advantage of. This is especially true considering that the Federal Reserve is going to have to raise interest rates at least three times according to their own internal memos, suggesting that the US dollar has much further to go against the Japanese yen. Remember, Japan is extraordinarily loose with its monetary policy, and that is not changing anytime soon.
USD/JPY Video 10.01.22
The immediate target is probably something close to the ¥117.50 level based upon previous trading, but it has been so long since we have been there it will be interesting to see whether or not “market memory” truly does hold. Pullbacks at this point in time should continue to be buying opportunities, and this market currently has a “floor” closer to the ¥112.50 level. Ultimately, this is a market that I think will continue to attract a lot of inflows, as we have been in an uptrend for some time and then of course get the occasional consolidation, just like the one that we broke out of.
I have no interest in shorting this market, but if we were to turn around and take out the ¥112.50 level, I would have to start to rethink the entire situation. Ultimately, this is a market that I think continues to find plenty of buyers on dips based upon value, and therefore this is a “buy on the dips” scenario.
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This article was originally posted on FX Empire
