USD/JPY Forecast – US Dollar Breaks ¥145

USD/JPY Forecast Video for 11-01-2024

US Dollar vs Japanese Yen Technical Analysis

Taking a look at the US dollar Japanese yen pair, you can see that the US dollar has rallied pretty significantly against the yen during early hours on Wednesday to break above the 145 yen level. That being said, we still have the 50 day EMA just above offering a little bit of resistance and I do think that you have to pay close attention to it. If we can break above there, then we have the shooting star from the Friday session of last week, and breaking above that would obviously be very bullish.

The biggest thing of course is we need some type of catalyst as we are currently trading between the 50 day EMA and the 200 day EMA, which is typically an area where you see a lot of sideways choppy action. Thursday features the consumer price index numbers while Friday features the producer price index numbers in the United States, which will have an influence on yields in the bond market. That of course is going to drive the US dollar either higher or lower, depending on what yields are doing. And that of course will be seen in this market. The Bank of Japan has almost nothing to say about raising or normalizing rates. They’ve thrown some hints out there a couple of times in the last year, but really have yet to do anything. And it shows just how feckless they are at the moment.

In general, I think this is a situation where we see more of a buy on the dip attitude, but if we were to break down below the hammer from the Tuesday session, it could have the US dollar reach back down toward the 142 yen level. If we were to break down below the 140 yen level, then it would be very catastrophic for the dollar against the yen. But as things stand right now, you still get paid to hang on to this trade, and I think that’s the story. Regardless, I think that you need to scale into a position instead of trying to jump “all in” right away in this environment.

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