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USD Looks for Higher Levels Against the Yen

On a slight pullback, I will be looking to buy the USD/JPY pair.

The US dollar experienced some initial pullback during Monday’s trading session, but ultimately bounced back to show signs of strength. The 50-Day EMA is currently offering a significant amount of resistance, but it is not expected to be an impenetrable barrier.


The yen is a popular asset during turbulent times.

Looking at the chart, it appears that the ¥131 level is the beginning of support, extending all the way down to the ¥127.50 level. The ¥127.50 level has recently offered a short-term double bottom, making it a potential floor in the market moving forward. As a result, investors may be looking for dips as an opportunity to purchase “cheap dollars,” particularly as the Japanese yen continues to face challenges.

The Bank of Japan practices yield curve control, which involves capping the amount of interest rates coming out of the country. As a result, every time interest rates on the 10-year JGB start to rise towards the 50 basis point level, the Japanese government has to print more currency to buy those bonds and keep those rates down. This policy can have a significant impact on the Japanese yen, particularly as interest rates around the world continue to rise.

If the market manages to break above the 200-Day exponential moving average, the next potential target is the ¥135 level. This level is a large, round, and psychologically significant figure that could attract a lot of attention and headlines. If the market breaks above this level, it would be a very bullish sign overall.

Given the market’s close ties to the bond markets, investors should keep a close eye on bond developments to help inform their decisions in this currency pair. However, the potential for dips and the ongoing challenges facing the Japanese yen could make it an attractive option for investors looking to purchase “cheap dollars.” This area could be the start of something bigger, but it is only a matter of time before we start to see a lot of questioning of the overall risk appetite around the world.

Overall, the US dollar is expected to continue experiencing significant volatility in the coming weeks. While there are potential buying opportunities to be found, investors should approach the market with caution and be prepared for potential ups and downs. As always, managing risk through appropriate position sizing is critical to success in this type of volatile environment.

  • On a slight pullback, I will be looking to buy the USD/JPY pair.
  • 132 would be an interesting place to find value.
  • Stop loss would be 131.
  • The pair breaking higher would also attract inflows that I am willing to join.
  • I am a buyer at 134.10, with a target of 137, and a stop at the 133 level.

USD/JPY Signal chart

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