The US dollar has rallied a bit against the Japanese yen during the trading session on Thursday but continues to see a bit of a struggle at the 160 level.
The 160 level being broken to the upside could open up the possibility of a move to the 160.4-yen level.
This is a major swing high from the 1990 trading year, and if we were to break above there, then we could really start to take off to the upside. Short-term pullbacks, I think you've got a situation where anytime we drop, you have to look at it as a bit of value.
Interest Rate Differentials and Key Support
Interest rates in America did initially spike during the day, but then they pulled back, and that's literally what's driving this pair more than anything else. The interest rate differential is pretty significant between the USD and the JPY currencies, and with that being the case, I think we've got the possibility of really taking off. This could be a massive move just waiting to happen.
Top Regulated Brokers
Underneath we have the 158-yen level as a massive support level, especially now that the 50-day EMA is sitting right there. That being said, this is a situation where traders are going to continue to trade this range, but eventually, if we see something big happen, this could be a trade that makes careers quite frankly.
Ultimately, if we were to break down below the 158-yen level, then we probably have to reset a bit. With this, I think you've got a situation where traders are looking to find value regardless of what happens. One thing's for sure; I don't want to own the Japanese yen.
Want to trade our USD/JPY forex analysis and predictions? Here's a list of forex brokers in Japan to check out.