USD/JPY Forecast – US Dollar Attempts to Break Out

USD/JPY Forecast Video for 18.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied just a bit during the trading session on Monday, showing signs of life again against the Japanese yen. The ¥134 level is an area where we have seen action in the past, so it’s not a huge surprise thing that the market will continue to look at it through the prism of importance. If we can continue to go higher, then it’s likely that we could go to the ¥135 level rather quickly. That of course is a large, round, psychologically significant figure, and an area that would cause quite a bit of headline noise.

On the other hand, if we were to turn around and break down from here, the 200-Day EMA could offer short-term support, and underneath there we would be looking at the 50-Day EMA closer to the ¥133 level. All things being equal, the market will continue to see a lot of volatility, but it does look as if we are trying to break down out to the upside, with the idea of the US dollar recovering from an oversold condition across the world.

Underneath, the ¥131 level is an area of support, while the ¥130 level is even more important. Because of this, the market will continue to be one that I think is supported over the longer term, but we probably need to take a bit of a look at the downside to continue building up momentum for bigger moves. The ¥137.50 level continues to be a major top, and therefore it’s something worth paying close attention to, and therefore you need to see this market break above there to become more or less a “buy-and-hold” environment.

Ultimately, I think that you are looking for short-term dips to find a little bit of value and continue getting long. After all, the Bank of Japan continues to keep its interest rates low, while the rest of the world continues to tighten monetary policy. Because of this, you will need to be very patient, but look at pullbacks as the opportunity to continue picking up dollars in what is more likely than not going to be a major shift in attitude.

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