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

USD/JPY Forecast Video for 26.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the trading session on Tuesday against the Japanese yen, as we continue to see a lot of noisy behavior. We are sitting just above the 200-Day EMA, which of course attracts a lot of attention. Just underneath the 200-Day EMA we have the 50-Day EMA, so both of these moving averages could offer a certain amount of support. On the other hand, if we do break down below there, then it’s likely that we could go down to the ¥130 level. The ¥130 level is a large, round, psychologically significant figure, and an area where we have seen buyers come to the rescue of the dollar previously.

On the upside, we have to pay close attention to the ¥135 level, an area that of course, is a large, round, psychologically significant figure as well, and therefore a lot of people will pay close attention to it and it of course would have a certain amount of influence via the fact that it would make for good headlines. Breaking above that level opens up the possibility of a move to the ¥137.50 level, an area that has already proven itself to be resistance more than once. Breaking that opens up more of a “buy-and-hold” type of market, but I just don’t see that happening quite yet.

Keep in mind that the Bank of Japan continues its yield curve control policy, meaning that they are making sure that the 10 year JGB does not rise above 50 basis points, and therefore every time the bond gets anywhere close to there, the Bank of Japan will be printing yen in order to buy more bonds and keep the rates down. In the meantime, it looks like we are simply chopping around and trying to figure out what to do with ourselves in the general vicinity. I anticipate more of the same, but it’s worth noticing that we have bounced rather hard the last couple times we have sold off, suggesting that there is a lot of support underneath, and therefore I think we do eventually break out to the upside.

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