USD/JPY Price Forecast – US dollar reaching towards highs again
The US dollar has gone parabolic against the Japanese yen in trading on Thursday, breaking above the ¥113 level. By doing so, the market looks ready to go much higher, and I think that we will probably go looking towards the ¥114.50 level given enough time. At this point, I believe that short-term pullbacks continue to be the way to go for buying opportunities, and I don’t have any interest in shorting this pair. I don’t know that we can break out above this pair in the short term, but longer-term it seems a bit like a foregone conclusion. It is because of this that I look at short-term pullbacks as buying opportunities but I would only piecemeal the position in.
Your capital is at risk
If we were to break down below the ¥112.50 level, that could change a lot of things but right now you can see that markets are essentially grinding sideways, which should tell you to basically stay out of any large positions. Eventually, we could get some type of catalyst and at that point we could get the significant break out. Right now though, it looks as if higher interest rates in the United States are of course propelling the US dollar higher against the Japanese yen, which has a central bank behind at that is light years away from raising rates. This makes perfect sense, and is what forex looks like when it focuses on the main driver, interest rate differential. However, the occasional headline will of course come back to wreck the joint.