USD/JPY Forecast – US Dollar Continues to Consolidate

USD/JPY Forecast Video for 06.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the trading session on Wednesday, as we continue to hang around and try to figure out where we are going next. That being said, it will probably only be a matter of time before the buyers come in and take out the upside. The ¥145 level above is a potential resistance barrier, but if we were to break above there, the market could go much higher. After all, the ¥145 level is a large, round, psychologically significant figure, and therefore I think there should be a certain amount of resistance there. However, if the market were to break above there, then it could kickoff the next leg higher.

To the downside, I believe the ¥142.50 level could be a potential support level, as it is the previous resistance barrier that we just broke out of. The 50-Day EMA below is also an area that we need to pay close attention to, especially considering that it is sitting at the top of a bullish flag.

When you look at the Bank of Japan, it’s obvious that they are nowhere near changing their monetary policy, and therefore the Japanese yen will continue to lose value in general. Because of this, and the fact that the Federal Reserve is staying very tight with its monetary policy, this is essentially going to be a “one-way trade.” In general, the market is a little overdone, but instead of pulling back, you can also see a sideways movement to make sure that the excesses worked.

Regardless, I have no interest in shorting this market anytime soon, due to the fact that it is so strong. Yes, it might be a little bit overdone, but the “measured move” suggests that we have further to go, perhaps to the ¥149 level. Regardless, expect noisy behavior, due to the fact that there are a lot of people still trying to figure out whether or not we have momentum, or perhaps it’s time to start taking profit. Regardless, longer-term momentum still continues to see upward pressure, and therefore think you have to look at this through the prism of finding value.

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