The US dollar fell initially against the Japanese yen on Tuesday, dropping down to the 112.75 level. By bouncing from there, the market looks as if it is ready to continue going higher, perhaps reaching towards the 113.50 level. A break above there should send this market to the 115 handle, and I believe that is a longer-term target. The US dollar breaking out against the Japanese yen is a strong signal for risk appetite, and I believe the interest rate outlook for the United States as the Federal Reserve looks to be hawkish. With the FOMC Meeting Minutes coming out today, we could get further fuel for the fire, and supercharge the moved to the upside. I think if we can stay above the 112 level, the market should continue to go much higher. The market should go to the 115 level over the longer-term, and once we break above there, I think that the USD/JPY pair could go as high as the 120 handle.
The risk appetite of global markets will continue to push this market around, so I think the given enough time we will see a reaction in this currency pair. The markets have favor the upside as of late, and it’s likely that they should continue to do so. The 112 level below should be a massive floor, and I think that the pair should continue to offer plenty of trading opportunities, as the markets continue to be volatile, but I do like the idea of taking advantage of pullbacks as value. This is a market that tends to attract a lot of attention due to stock markets and of course interest rate differentials, both of which should favor the upside. The S&P 500 is especially influential, keep this in mind when trading the USD/JPY pair.
Written by FX Empire