USD/JPY Forecast – The US Dollar Finds Support

Christopher Lewis
Published: Feb 8, 2023, 14:55 GMT+00:00

The US dollar initially dipped against the Japanese yen during the trading session on Wednesday but has found buyers underneath yet again.

US dollar, FX Empire

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USD/JPY Forecast Video for 09.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back initially during the trading session on Wednesday but found buyers underneath. At this point in time, it looks as if the market is ready to try and rally again, and therefore I think we got a situation where plenty of dip buyers have stepped into the market. Ultimately, this is a market that I think is trying to change its overall attitude, as we have seen interest rates around the world pick up a bit. Ultimately, the market will continue to pay attention to the Bank of Japan and what it has to do in order to keep rates below the 50 basis points threshold in the 10 year note.

The 50-Day EMA sits just above the candlestick for both Monday and Tuesday, so I think that could be short-term resistance. Ultimately, I think this is a situation where we are trying to turn things around and ultimately it looks like we are trying to confirm the potential double bottom from a couple of weeks ago. At this point, I think the Japanese yen is more likely than not going to have a lot of downward pressure on it, but ultimately, it’s likely that we see plenty of noise in this pair. That is typical for this market, because quite frankly it’s a situation where we have to look at this through the prism of volatility, but it does make a certain amount of sense that you would see it if we are in fact trying to change the trend.

That being said, the double bottom underneath which is right around the ¥127.50 level is essentially a major bottom from what I can see, and if we were to break down below there, then it could open up the door to much more significant selling.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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