USD/JPY Forecast – US Dollar Consolidates Against Yen

Christopher Lewis
Published: May 29, 2024, 14:04 GMT+00:00

The US Dollar continues to consolidate against the yen, as we are essentially taking a bit of a break at this point. However, the trend remains very much intact and bullish. I am a buyer only at this point.

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US Dollar vs Japanese Yen Technical Analysis

It looks as if the market is content to simply sit here and that’s not a huge surprise considering there’s no real reason to be short of this market even if you don’t necessarily like buying it here. You get paid at the end of every day via swap and I think that is something that people continue to hang on to and therefore I think is part of the reason why we have seen such resiliency. After all, the Federal Reserve remains tight, and the Bank of Japan has absolutely no possibility of changing monetary policy anytime soon.

With that being the case, I believe that the 155 yen level underneath is the floor in the market, especially as the 50 day EMA is starting to race toward it. The only real shot at this pair falling apart would be if the Bank of Japan intervened again. And I think they just learned their lesson that they can only slow down the market, not necessarily change the trend. Most interventions don’t work over the long term anyway, so this should not be a huge surprise.

I think at this point, we are going to try to get to the 160 yen level, but it may take some time to get there. I look at dips as an opportunity to get long every time they happen. Given enough time, this is a market that if we break above the 160 yen level, that kicks off the next leg higher. In general, I think the Japanese yen is in trouble against almost everything, not just the US dollar.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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