USD/JPY Forecast – US Dollar Continues to Look for Support Against Yen

Christopher Lewis
Published: Feb 2, 2023, 14:15 UTC

The US dollar initially pulled back a bit against the Japanese yen, but then turned around to show signs of life on Thursday.

US Dollar, FX Empire

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USD/JPY Forecast Video for 03.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back a bit against the Japanese yen but continues to find buyers underneath. At this point, one has to wonder whether or not the US dollar is trying to turn things around. After all, the Bank of Japan will have to continue to fight rising rates, and therefore printing unlimited yen. Beyond that, the US dollar is far oversold at this point, so would not be a huge surprise to see a little bit of a turnaround. In this scenario, I anticipate that we will have to pay close attention to the ¥130 level, because if we can break above there handily, that would be a very bullish sign to say the least.

The 127 level underneath is the bottom of a major support region, and I think we need to pay close attention to it going forward. As long as we can stay above there, we have a real shot at continuing to find buyers. However, if we were to break down below the ¥127 level, then I believe that the market will enter a bit of a freefall, as there is nothing but air underneath.

If that happens, I suspect that we will see the Japanese yen strengthened across the board and offer a huge move. On the other hand, if we were to turn around from here, and perhaps even take out the inverted hammer from January 18, the market could really start to take off to the upside. As has been the case for a while, you will have to pay close attention to the bond markets, and what they may be doing.

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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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