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USD/JPY Forecast – US Dollar Bounces From 200-day EMA

By:
Christopher Lewis
Published: Jul 25, 2024, 14:29 GMT+00:00

The US dollar has been very negative in the early hours of Thursday, but then bounced as we tested the 200-Day EMA, and the 152 yen level. This is a market that also got the shock of the Advanced GDP numbers in America coming out hotter than anticipated.

In this article:

US Dollar vs Japanese Yen Technical Analysis

The U.S. dollar plunged against the Japanese yen during the early part of the session on Thursday but has turned around a bit as the advanced GDP numbers came out at 2.8% instead of 2% in America, suggesting that the Fed still will have to remain tight for a while. If that’s going to be the case, that throws the interest rate differential shifting into disarray and therefore, we have a situation where the bounce makes a lot of sense.

We’ve seen a lot of panic selling as of late and it certainly makes a certain amount of sense that this is a market that will continue to be noisy, but I also recognize that we have a situation where we had bounced from the 200 day EMA, so technical traders just in that reasoning will more likely than not continue to see a lot of interest in this as it’s not only catching a little bit of a falling knife but also at an area where it had gotten so cheap that I think it made sense to get involved.

Ultimately this is a market that I think is probably going to try to get to the 155 yen level but keep in mind there has been a massive amount of technical damage done so it’s more likely than not it’ll be more of a grind as the market has seen so much pressure. Ultimately, I still don’t like the idea of buying the yen, as the interest rates will continue to favor the upside here.

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

About the Author

Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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