As of this writing, the USD/JPY is trading above the 123.000 juncture after producing another surge higher. The move upwards this morning may have been fueled by word the Bank of Japan is going to start purchasing Japanese government bonds in an apparent effort to calm the USD/JPY. In the short term however, the news has seemingly spurred on additional pandemonium for the Japanese yen as it has crashed to new long term lows against the USD.
Speculators will need to be extremely careful. The USD/JPY can move quickly on most days, but the near term appears set to create a high level of nervous trading for the Forex pair. The USD has been strong in Forex. Typically, the Japanese yen has served as a safe haven currency in times of global discontent, but the USD/JPY was trading below the 103.000 level on the 1st of December 2021, and has experienced a freight train upwards since this date. Fundamentally, this move is not only about the war in the Ukraine, nor only the moves from the U.S Federal Reserve. Something else is stirring the pot.
The heights of the USD/JPY are now traversing values it has not seen since November of 2015. Traders who are trying to figure out how high the Forex pair can climb with technical charts may find the task rather adventurous, particularly if they intend on continuing to speculate on more momentum upwards.
The old saying of ‘follow the trend’ is often correct, but traders need to be aware when this express elevator chooses to stop, the ride downwards could become swift and very painful if a fall is violent. Conservative leverage and adequate stop losses are essential for the USD/JPY under the present dangerous conditions.
If the USD/JPY sustains its price above the 123.000 mark, traders may want to aim for the 123.250 and 123.500 levels next. For traders just entering the USD/JPY circus, strict price orders should be used to begin trading the Forex pair, otherwise it is likely the fill will not meet expectations if another sudden burst of volatility unfolds.
How high can the USD/JPY go? During the calendar year of 2015 the USD/JPY did hit the 125.000 levels. These may seem ultra-high and these values may never be seen during this current trajectory, but it should point out that another leg up is not entirely out of the question.
USD/JPY Short-Term Outlook
Current Resistance: 123.590
Current Support: 122.530
High Target: 124.560
Low Target: 121.350
