USD/JPY Forecast 12/12: Bounces After Initial Fall (Video)

(MENAFN- Daily Forex)

• USD/JPY fell sharply on Thursday before rebounding from the 155 level, which continues to act as a strong floor.
• With the Bank of Japan avoiding tightening and the Fed signaling uncertainty, the pair remains a buy-on-dips market amid choppy consolidation.

The US dollar has fallen pretty significantly against the Japanese yen during trading here on Thursday, but the 155 yen level has been like a floor, and we've bounced quite nicely. So to me, it looks like we're at least trying to consolidate after all. There are a lot of questions out there about what's going to happen next with the Federal Reserve, because we had suggested previously that there were going to be multiple interest rate cuts, but now the data-dependent phrase keeps getting kicked around.

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With that being said, and the fact that the Bank of Japan has no real intention of tightening up monetary policy if they can avoid it, that makes sense that we will eventually go higher. And even if we do break down from here, I see the 50-day EMA at the 153.88 level offer in support, followed by the 153 yen level.

All things being equal, you know, I've been pretty obvious about it that I'm a buyer here of this pair, and I like these pullbacks for a little bit of value. I look for short-term pullbacks that show signs of bounces like we have had on Thursday as a potential entry. I build on a position, I collect swaps at the end of the day, and my account grows as a result. If we were to break down below the 152.80 yen level, then it's possible that the market could drop to the 200-day EMA.

EURUSD Chart by TradingView

That being said, I think we're going to see a lot of choppy and volatile trading as we more likely than not probably try to stabilize. The question is, what's the floor? Is it 155 yen or is it 153? We'll know in a few days.

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

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