USD/JPY Forecast – US Dollar Attempts to Stabilize

USD/JPY Forecast Video for 22.12.22

US Dollar vs Japanese Yen Technical Analysis

The US dollar has stabilized a bit during the trading session on Wednesday, as we have seen play out over the last 24 hours. That being said, the market has seen a lot of negative pressure, as the Bank of Japan has finally allowed the interest rates in that country to rise a bit. That being said, there was a massive short Japanese Yen position on that needed to be taken on.

If we were to turn around take out the 200-Day EMA, it could be a bullish sign. However, it’s really not until we take out the top of that nasty candlestick from Tuesday that the uptrend is reconfirmed. If we take down the pair below the ¥130 level, then we could see a break down even further, perhaps sending this pair down to the ¥125 level underneath.

All things being equal, this is going to be very interesting this year, and probably the most active pair out of all of the majors. I think given enough time, we have a situation where it’s going to be an excellent trade, but we need to see how the reaction to this candlestick plays out. After all, the way things were looking during the trading session on Tuesday, you’d think that the US dollar was never going to bounce.

That being said, we are not out of the woods yet and we also have very illiquid trading conditions. As things stand right now, I would be apt to fading signs of exhaustion after short-term rallies, but anything is possible at this point in time, and you need to be very cautious with your trading size.

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