USD/JPY Forecast – US Dollar Bounces

USD/JPY Forecast Video for 16.11.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied rather significantly against the Japanese yen during the trading session on Wednesday, as we continue to see a lot of volatility. After all, what has transpired is that the CPI numbers on Tuesday were weaker than anticipated, having traders begin to think that the Federal Reserve is going to slow down its monetary policy. However, during the Wednesday session we have seen the PPI numbers come out hotter than anticipated, and that of course has turned the market on its head, and now we are trying to sort out whether or not the Federal Reserve is anywhere near changing its attitude.

Either way, the Bank of Japan is doing nothing to tight monetary policy, and now that the ¥150 level has offered a bit of support, it shows that there are most certainly plenty of buyers out there willing to jump in and take advantage of value at this point. The 50-Day EMA sits underneath there as well, and I think that gives us an opportunity to use it as a “floor in the market.”

Just above, we have the ¥152 level, which is an area where we have seen resistance previously, and a break above there opens up the possibility of a move to the ¥155 level. In that scenario, we could see much higher pricing, given enough time due to the fact that there is a major interest rate differential between the 2 central banks, something that does not look like it’s going to go away anytime soon.

With this being the case, I think it’s probably a situation where we will see every time this market pulls back, there should be buyers getting involved in order to take advantage of “cheap US dollars.” I have no interest in buying the Japanese yen anyway, due to the fact that the Bank of Japan has to keep its interest rates low with the massive amount of debt that Japan finds itself facing. With this, I remain bullish, and I recognize that this latest pullback has been yet another buying opportunity in a market that has seen that happen multiple times over the last several months.

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