USD/JPY Forecast – US Dollar Continues to Hover Around 200-Day EMA

USD/JPY Forecast Video for 17.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has dipped a little bit during the trading session on Thursday, as we continue to see quite a bit of noise in the USD/JPY pair. Alternatively, this is a market that I think continues to be the focus of a lot of trading, as we have seen so much in the way of yield curve control coming out of the Bank of Japan. With that being the case, I think it is probably only a matter of time before we see some type of bigger move.

As interest rates around the world continue to rise, I believe that the market is going to be difficult, mainly due to the fact that it’s going to be so noisy. After all, the Bank of Japan is trying to keep its 10 year yields down the 50 basis points, and in doing so will have to buy bonds as rates rise. The only way to do that is to print more currency, and therefore it drives down the value of the Japanese yen. This is exactly what happened last year, and therefore we in the Bank of Japan decided that it was going to allow its 10 year yield to rise from 25 basis points to 50 basis points, we have seen the Japanese yen strengthened quite drastically.

Having said that, it looks like the tide is turning and I suppose it’s probably worth noting that we pulled back to the roughly 50% Fibonacci level of that entire move, and now it looks like the buyers have returned. The ¥135 level above is a little bit of a barrier, and the ¥132.50 level underneath is support.

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