USD/JPY Forecast – US Dollar Bounces Against the Japanese Yen

USD/JPY Forecast Video for 22.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied during the trading session on Monday, as we are now well above the ¥145 level yet again. Alternatively, we are in an uptrend and I do think that continues over the longer term. Keep in mind that the Bank of Japan continues to keep its interest rate policy very loose, and therefore it’s going to continue to weigh upon the value of the currency. All things being equal, I do think that we go higher, but in general I think this is a market that is a little bit overextended, so we may have a short-term pullback from time to time. Breaking down below recent consolidation could be a sign that we need a deeper correction, and if we do get that correction, we could drop all the way down to the ¥142.50 level, and still remain rather bullish.

Speaking of ¥142.50, we have the 50-Day EMA in that area, and therefore it’s likely that it becomes more or less a “floor in the market”, and therefore an area that I think a lot of people would be very interested in getting involved. If we were to break down below that level, then it’s possible that we could go down to the 200-Day EMA, or perhaps even worse. However, unless the Federal Reserve explicitly says that they are going to change their monetary policy, or perhaps if the Bank of Japan suddenly starts to get a little bit tighter.

At this point, neither of those looks very likely, so I think we’ve got a situation where the market will eventually go higher over the longer term. I also like the idea of buying dips, because it gives you an opportunity to buy. In general, this is a situation where the market will eventually try to figure out where we are going over the longer-term, but I think at this point you can probably have a look at the ¥150 level as a potential target. In general, this is a very noisy market that continues to see upward momentum over the longer term and I think that stays the same for the foreseeable future.

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