US Dollar Continues a Parabolic Run Against the Japanese Yen

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has risen again against the Japanese yen during the course of the week, breaking well above the ¥126 level. As long as the Bank of Japan continues to fight interest rates in the bond market, it is essentially in a quantitative easing policy. The rest of the world’s major central banks are doing the exact opposite, especially with the Federal Reserve being ultra-aggressive. That sets up a perfect momentum play, as you have seen over the last several weeks.

When you look at the chart, you can see how clearly the buyers have been in control. What I find particularly interesting is that we broke above at the massive shooting star from two weeks ago, and now we are breaking above resistance on the monthly chart. While I do anticipate that there should be a significant pullback at one point or another, the reality is that we are seen a massive shift in the way that the central banks are operating.

On the downside, the ¥120 level would be the “floor in the market.” The market pulling back should be thought of as a buying opportunity, and not necessarily a shorting opportunity. However, if we were to wipe out below the ¥120 level, that could be a very negative turn of events. We would also need to see the Federal Reserve step away from its tightening policy, something that it is not ready to do anytime soon. Because of this, it would take something rather drastic to make that happen. As long as that is going to be the case, it is likely that we continue to see the upside pressured.

USD/JPY Price Forecast Video 18.04.22

For a look at all of today’s economic events, check out our economic calendar.