The US dollar initially fell against the Japanese yen on Friday, but we continue to see buyers take advantage of “cheap US dollars.”

USD/JPY

The US dollar initially fell against the Japanese yen during the trading session on Friday, but turned around to show signs of life again. Ultimately, this is a market that I think continues to see a lot of questions asked of it as we are watching the US yields drop, but at the same time, those yields are so much higher than Japanese yields, it’s very difficult to imagine things changing.

The 163 yen level above is a level that a lot of people will be paying close attention to. If we can clear that, then it allows the US dollar to go much higher, perhaps breaking out to the 165 yen level. Short-term pullbacks I think, continue to get bought into, as you can see, we are in the midst of forming an ascending triangle, and that ascending triangle, of course, is a bullish sign.

Technical Analysis and Key Levels

The 161 yen level underneath the current trading level is support, with the 50-day EMA also sitting there as well. Ultimately, the market remains one that rewards traders who jump in and start buying every time the US dollar gets a little cheaper. This is the way I look at this pair for the longer-term move as well. I have no interest in trying to fight the momentum.

I’ve got no interest in shorting over the longer term, and really, it’s not until we break down below the 200-day EMA that you even begin to have those thoughts. I have been long of this market for quite some time, and every time it dips, I add a minute amount to that position to simply build up a longer-term buy and hold position.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

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