Start Trading Now Get Started
Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

USD/JPY Forecast: Trying to Find Support Against Japanese yen

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

At this point, we need to start looking at the possibility that the recovery is still trying to get off the ground. 

  • The USD/JPY has drifted a bit lower during the trading session yet again on Tuesday, as we continue to hang around just below the ¥140 level.
  • That this market is hanging around this area is a slightly significant signal, as it had been previous support.
  • At this point, the market is stuck between the 50-Day EMA and the 200-Day EMA, and basically at an uptrend line that has been important for a while.

At this point, we need to start looking at the possibility that the recovery is still trying to get off the ground. I do believe at this point it’s likely that we will have to see some type of decision made because quite frankly the Japanese Yen still has the specter of the Bank of Japan forcing its bond yields down. This is printing yen and bringing it into the market so that obviously is a bad look for the currency. I do think that given enough time we will see that come back into the forefront.

Waiting for the Federal Reserve

Currently, it’s all about all the cheap and free money that Wall Street is still expecting to come about. After all, we have an entire generation of traders that have made a nice living for the last 14 years based upon cheap money, and now they have no idea how to react. The idea is that they are going to “force the Fed” into doing what they wanted to. In the past, this trick has worked but right now it looks as if the Federal Reserve is not willing to buckle quite yet. Inflation still rages in the United States, and therefore it’s difficult to get overly bullish on risk appetite over the longer term.

Yields have dropped across the world, and that has alleviated some of the pressure on the Bank of Japan, which is shown on this chart. However, as soon as is yields pick back up, this is a pair that will more likely than not continue to go much higher. Because of this, you need to keep an eye on the 10-year note, and of course the US dollar itself. On the other hand, if the Federal Reserve blanks and finally gives Wall Street what it wants, this pair is going to absolutely implode to the downside.

USD/JPY

Ready to trade our Forex technical analysis? Here are the best Forex brokers to choose from.

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

Most Visited Forex Broker Reviews