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

USD/JPY Forecast Video for 05.12.22

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen rather hard against the Japanese yen in early trading on Friday, but then turned around to show signs of life as the 200-Day EMA seems to be offering a bit of longer-term support. Furthermore, we had the jobs number come out hotter than anticipated during the day, so that of course had an influence on the interest rate market, which also has an influence on this pair. Ultimately, I think this is a situation where you have a market that is being very noisy, but it does look like perhaps we are going to at least make an attempt to bounce rather hard.

If you’ve been following my analysis lately, you know that I am paying very close attention to the ¥135 level, which is an area that a lot of people will be looking at through the prism of psychology. The market almost always tends to pay attention to these big figures on one level or another, and quite frankly I think it’s very possible that we see it do it again. Ultimately, this is a market that is moving based upon the massive shift in interest rates, which of course have favored the United States dollar.

Whether or not that holds is a completely different situation, but keep in mind that the Bank of Japan continues to fight interest rates rising, so if we do see them rising around the world, you will see a lot more pressure on the yen itself. Ultimately, I think you need to be cautious about your position size, but it does look like we are threatening some type of bounce from here.

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