USD/JPY Forecast – US Dollar Continues to Bounce Around

USD/JPY Forecast Video for 09-01-2024

US Dollar vs Japanese Yen Technical Analysis

As you can see, the dollar yen has gone back and forth during the trading session on Monday, but really at this point, we don’t have a whole lot going on that influences where I would be putting money. The 50-day EMA above is a significant resistance barrier, and underneath we have the 200-day EMA offering support we are hanging around the 145 yen level, which of course is an area that is a large round, psychologically significant figure, but it is also an area where we’ve seen a lot of noise previously. A lot of this is going to come down to the 10 year yield, so therefore you have to pay attention to that in America, because as the yield increases, it does tend to drive this pair higher.

On the other hand, you also have to pay attention to the Bank of Japan, which has proven itself to be a bit hesitant to tighten monetary policy. True, they’ve said more than once that they might do something, but that’s the usual jawboning that the Bank of Japan does. If we break down below the 200-day EMA, it’s possible that we could go looking to the 142 yen level. In that scenario, things get a little bit more dicey.

Anything below there then starts to question whether or not we can stay in the uptrend. I think the Japanese Yen is a little bit of an outlier and as a result I think it’s probably only a matter of time before we do rally again but I think you get more returns buying other currencies against the Yen such as the British Pound or maybe the South African Rand.

Keep in mind the interest rate differential still works out in your favor, so you do get paid to hold this currency pair. And even if you do not choose to buy this pair itself, you can use it as an indicator as to whether or not the yen is strengthening or weakening. You can use that as a secondary indicator in other currencies based against the Japanese yen.

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