(MENAFN- Daily Forex)

• USD/JPY continues to climb after breaking above the key 155 level, supported by a wide rate differential.
• Pullbacks remain buying opportunities, with traders eyeing 154 and 153 as support and a potential move toward 159.

The US dollar has rallied during Monday trading to show strength again against the Japanese yen as we have broken above the 155 yen level, an area that is a large, round, psychologically significant figure, and an area that clearing is a very strong sign. Short-term pullbacks open up the possibility of buying dips, with the 154 yen level being support right along with the 153 yen level.

This Pair Pays to be Long

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Keep in mind that the interest rate differential continues to favor the US dollar and the Japanese yen despite the fact that the Japanese yen is seeing rates rise behind it. That actually is a significant problem. And I think money will run from Japan as market participants continue to see just what kind of pickle the Japanese are in. Demographics are coming to roost right along with all of that quantitative easing that had been going on for decades.

EURUSD Chart by TradingView

With this, I still like the idea of buying the US dollar on short-term pullbacks as it will eventually show up as being bullish, and value hunters, I think, continue to drive this pair much higher. It doesn't mean that we explode to the upside, but keep in mind that you get paid at the end of every day, and I think traders will just simply hang on to this. I have a target of about 159 yen at the moment, but we'll just have to wait and see.

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

I've been long of this pair since the middle of summer in various amounts and have no interest whatsoever in shorting right now.

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