USD/JPY Forecast – US Dollar Continues to Look Stable
USD/JPY Forecast Video for 01.02.23
US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back just a bit during the trading session on Tuesday, touching the ¥130 level, only to turn around and show signs of life again. As we start the Tuesday Federal Reserve meeting, a lot of people will pay close attention to the Federal Reserve statement, the interest rate hike, and of course the question and answer session afterwards.
The markets will more likely than not continue to see a lot of choppy behavior between now and then, and it’s a bit difficult to imagine that a lot of people would be putting huge amounts of money into it as a result. That being said, I do think that we are trying to form some type of basing pattern, as the Bank of Japan has recently reiterated its decision to keep interest rates at 50 basis points, and now if the Federal Reserve sounds extraordinarily tight for longer, this sets up a potential huge run to the upside. If we can take out the inverted hammer jet formed last week, then we can go much higher. On the other hand, if we break down below the ¥127 level, then it opens up a huge air pocket underneath, allowing this pair to plunge at that point.
All things being equal, I do think that we are more likely than not going to see a bit of a bounce but it’s not until we break above that massive, inverted hammer that I have an actual buying signal. If and when we get that, I anticipate that this market will continue to grind higher for quite some time, as it should attract more momentum seekers.
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