US Dollar Settles Down Against Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied ever so slightly against the Japanese yen, but at this point, we are pressing against a major resistance on the monthly chart, so I think a pullback would make a considerable amount of sense. Ultimately, this is a market that still looks bullish, but being so overstretched, it probably needs to pull back.

I anticipate that the ¥122.50 level could be a support level, as it is an area where we have seen a lot of noise in the past. Ultimately, I believe that the market is going to continue to see that as an area of importance, so I believe that short-term pullbacks will be thought of as buying opportunities. That being said, if we were to break above the ¥126 level, then it opens up a much bigger move. Keep in mind that the bank of Japan continues to fight the interest rates rising soaking up bonds, and therefore it will continue to weaken the Japanese yen because it is essentially the same thing as “printing yen.” Furthermore, you need to keep in mind that the other central banks around the world are looking tighter than they are loose, so that will continue to cause issues with the Japanese yen.

At this point, I just do not see an argument to short this market, at least not until we break down below the ¥120 level, because that would be a massive turnaround. Unless the Bank of Japan changes its plans, I just do not see the catalyst to make that happen. The other outlying possibility would be that the Federal Reserve finally steps back and says that it cannot raise interest rates as aggressively as we have been suggesting.

USD/JPY Price Forecast Video 13.04.22

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