USD/JPY Forecast – US Dollar Continues to Find Support

Christopher Lewis
Published: Jun 1, 2023, 12:53 GMT+00:00

The US dollar has pulled back just a bit during the trading session on Thursday but have found enough buyers underneath to push the market to the upside.

US Dollar, FX Empire

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USD/JPY Forecast Video for 02.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the course of the trading session on Thursday, as we continue to see a lot of noisy behavior. With this being the case, the market is likely to looking toward the ¥140 level above, which of course is a large, round, psychologically significant figure and an area where we’ve seen a little bit of selling pressure. That being said, I do think it is probably only a matter of time before we see this market breakout above there, especially as the interest rate differential between the United States and Japan is so wide.

The ¥138 level underneath is the top of an ascending triangle, which of course is a pattern that almost everybody is paying close attention to. With this being the case, I think it’s probably only a matter of time before we find plenty of buyers, due to the market memory, and of course the fact that most people will understand that technical traders will be chasing this move. Because of this, I think it’s probably only a matter of time before we get a bit of a move. If we do break above the ¥140 level, that opens up the possibility of fulfilling the entire measured move, which is all the way to the ¥148 level.

The 50-Day EMA sits right around the ¥136 level and is rising quite drastically, and therefore I think it’s probably only a matter of time before that would come into the picture to show signs of support as well, assuming that we even drop down that level. In general, I think this is a scenario where we continue to see a lot of noisy volatility, but clearly we have a lot of questions to ask, and clearly have a lot of upward pressure on the US dollar. Furthermore, the market also has to keep in mind that the Federal Reserve is likely to remain tight for the foreseeable future, while the Bank of Japan continues to insist on a very loose monetary policy, making the Japanese yen much less appealing.

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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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