USD/JPY Forecast – US Dollar Continues to Find Buyers on Dips

USD/JPY Forecast Video for 30.01.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially pulled back a bit during the trading session on Friday to dip below the ¥130 level. The 130 and level course is a large, round, psychologically significant figure that people will want to pay close attention to, and therefore I think you need to see this as a situation where we are trying to build some type of base, but whether or not we can remains to be seen.

Keep in mind that the Bank of Japan continues to see a need to do yield curve control and has reiterated that recently. If we get any US dollar strength at all, and of course interest rates rising globally, that will put a lot of pressure on the Japanese Yen and it would make sense for this pair to go to the upside. If we can take out the top of the Wednesday candlestick of last week, which was when the Bank of Japan reiterated its desire to keep yields low, then I think it kicks off the next leg higher in this pair. That won’t be easy, but it is a possibility.

On the other hand, if we turn around and break down below the ¥127 level, it opens up a huge air pocket in this pair that a lot of people will be paying close attention to. Either way, we are at a large inflection point so some decisions will have to be made rather soon. In the meantime, I think you need to be very nimble and look at this more or less as a choppy and range bound type of short-term market.

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