USD/JPY Forecast – US Dollar Continues to Grind Higher Against the Japanese Yen

USD/JPY Forecast Video for 17.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially pulled back just a bit against the Japanese Jen, showing signs of hesitation, but it now looks as if we are trying to grind even higher. This should not be a huge surprise, due to the fact that the interest rate differential between the 2 central banks continues to be a major driver of where things are going, as the Bank of Japan refuses to do anything to tighten its monetary policy. At this point, I anticipate that the market more likely than not goes looking toward the ¥147.50 level above, maybe even the ¥150 level given enough time.

Underneath, I still see a lot of support and I would also point out that we are probably a little bit overstretched at the moment. I’m looking for some type of significant pullback in order to take advantage of, and by value. The value at that juncture could be found at lower levels, but I certainly would not be a seller of this market at the moment, despite the fact that I do think that a pullback is probably more likely than not.

The 50-Day EMA sits just below the ¥142.50 level and is rising. At this point, the market is more likely than not look at that as dynamic support, but quite frankly I don’t think it has the likelihood of attracting the pair at the moment, due to the fact that it is so far above there. All things being equal, I think we’ve got a situation where you look for a certain amount of support on pullbacks, and therefore I think the best option may be just simply taking advantage of dips, as we are going to go much higher over the longer term.

As far as selling is concerned, I just don’t see a situation where that’s likely to happen, but I suppose if we broke down below the ¥140 level, then I would have to reassess the entire situation. That being said, it’s probably not until either the Federal Reserve or the Bank of Japan change their attitudes that this pair turns around.

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