US Dollar Continues to Pressure the Upside

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit against the Japanese yen during the trading session on Wednesday, reaching the highs from the monthly chart. At this point, we may get a little bit of a pullback because we are so overdone, but I do think it is only a matter of time before buyers step back in. This will be especially true if the Bank of Japan continues to fight interest rates. After all, they are essentially “burning yen” by soaking up all of the bonds, and this has been a major driver as the yen has lost 10%.

The ¥122.50 level is an area where I would expect to see a certain amount of support, so I do think we will more likely than not see buyers in that area on a pullback. If we do break down below there, then it is possible that we could go to the ¥120 level. The ¥120 level also has the added benefit of the 50 Day EMA reaching towards it as well. All things being equal, this is a market that is where overbought, so I would not be surprised at all to see a significant pullback. Quite frankly, markets cannot go straight up in the air forever, so sooner or later we should get a bit of a pullback based upon gravity alone.

That being said, if we were to break out above the ¥126.50 level, the market is ready to go much higher, and in fact higher than we have been for several years. It will be interesting to see how this plays out, but I do think that we are more likely than not are going to struggle to continue the momentum.

USD/JPY Price Forecast Video 14.04.22

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