USD/JPY Forecast – The US Dollar Falls After PPI Number

USD/JPY Forecast Video for 15-01-2024

US Dollar vs Japanese Yen Technical Analysis

The U.S. dollar initially tried to rally against the Japanese yen, only to turn around and show signs of negativity later in the day. This was exacerbated by the PPI numbers coming out cooler than anticipated. And therefore, it does make sense that we would see this pair reverse. Now that being said, it’s likely that this is a market that still has plenty of support underneath, and I do believe that given enough time we have the possibility of buying the dip basically due to the fact that the interest rate differential is still going to be very wide between the two. The Bank of Japan is in no mood to normalize rates, yet, due time they probably will have to if they want to save their own currency, but they tend to be all bark and not bite.

Keep in mind that this pair is highly sensitive to the bond markets, so we need to pay close attention to what interest rates are doing in the United States, but at the same time we also have to pay attention to whether or not the Bank of Japan is going to do anything whatsoever to lift their own rates. Ultimately, this is a market that I think continues to see a lot of volatility which is typical for this pair.

That being said, the 200 day EMA underneath should continue to be very supportive and therefore I’ll be paying close attention to it, and that assumes that we even get there. If we turn around and recapture the 145 yen level on a daily close, then I think that shows that the buyers are going to come back in and really push this market to the upside. Clearing the top of the candlestick for Friday would also be very bullish and send this market looking to the 147.33 yen level. On a breakdown below the 200 day EMA, then we could see this market down to the 142 level and then possibly down to the 140 level. Anything below 140 would be extraordinarily negative.

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